Vennor Investments Pty Ltd
Vennor is the epitome of the corporate mystery. “Manufacturing of miscellaneous fabricated products” is a very apt description for this company because it appears to be engaged in manufacturing of miscellaneous fabricated tax structures. However, short of paying ASIC hard cash for company searches, you will find nothing about Vennor Investments anywhere. It is as mysterious as it is large. It has no website, nor a phone number which actually connects to a live answering machine. ASIC searches show Vennor is part of the Dutch building products empire of LafargeHolcim.
While it may be the case that Lafarge pays tax elsewhere in its corporate structure in Australia, the company, when contacted, declined to say where. Its financial statements show a range of related party transactions with foreign associates.
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We are counting down the Top 40 Tax Dodgers. There are now three years of tax transparency data published by the Tax Office and we have used this data to work out which large companies operating in Australia have paid the least tax, or no tax.
Notable players such as Google, eBay, Booking.com, Expedia are not near the top of the ATO list. That's because they don't (yet) recognise income earned here; instead, they book Australian revenue directly to their associates offshore. They will be ranked in due course.
For other large corporations, and in particular, multinationals, the main steps in avoiding tax are made by reducing their taxable as much as they can; usually by sending it offshore in interest on loans, "service" fees or other payments to foreign associates. So, we have set a threshold. We have included only those companies which managed to wipe out 99.5 per cent or more of their taxable income over three years.
Qantas, therefore, is not on this list. Although it made $46 billion total income over the ATO's three years, it was able to reduce this by 99.4 per cent to $264 million, just missing our cut-off.
Taxable does not mean taxed. It paid zero.
The airline had made large losses which were offset against profits. Many large corporations which have paid zero tax in ATO data, have legitimately made losses and have therefore built up "tax-loss shelter".
Many others however, such as ExxonMobil and EnergyAustralia, are on the list as they managed to eliminate all or most of their taxable income by "debt-loading" or other means of aggressive tax avoidance.
In response to the censorship scandal which has engulfed the ABC in recent days as the government sought to muzzle its corporate tax coverage, the Tax Office put out a useful statement on its transparency data.
In this, the first iteration of michaelwest.com.au corporate tax rankings, we are going purely on the Tax Office data. We will also publish a list of Australia's better corporate taxpayers, those companies who contribute most to the country in which they operate.
The Tax Office data is by no means perfect. But sometimes we can identify patterns. In many cases, there are multiple entities with the same ultimate offshore parent reporting. One entity may pay zero tax, another may pay at the statutory 30 per cent rate (even if on low taxable income). We endeavour to be fair in our reporting to recognise these issues.
The data also recognises trusts as well as companies. For trusts, it is the members (investors) rather than the trust who are ordinarily required to pay the tax. In many cases however it is fair to recognise trust structures for what they are, as tax is often the main reason these vehicles have been structured as trusts.
Companies are welcome to debate their rankings or to touch base to clarify or defend their tax practices. We will append or link these submissions.