Exxon Mobil Corp and Chevron Corp paid no tax in Australia in the 2016 financial year, the third year in a row, despite reporting billions of dollars in income from operations in the country, a report from the Tax Office showed on Thursday.
Exxon Mobil, which has oil and gas production in the Bass Strait and a stake in the giant Gorgon LNG project among other assets in Australia, reported $6.7 billion in income, but it reported a loss for taxable income and paid no tax, similar to the previous two years.
Multinational tax net tightens
The global effort to extract a fair share of tax from multinationals is stepping up, say Tax Commissioner Chris Jordan. Courtesy ABC News24
Exxon said it had no taxable income as it had invested nearly $18 billion over the past few years on major projects including Gorgon and the Kipper Tuna Turrum field.
“As these multi-billion investments were completed in 2017 and have started production, the amount of tax paid by ExxonMobil Australia is anticipated to increase significantly,” said Travis Parnaby, a spokesman for the oil major.
Exxon said it had no taxable income as it had invested nearly $18 billion over the past few years on major projects including Gorgon and the Kipper Tuna Turrum field. Photo: Bloomberg
Chevron reported $2.1 billion in income for 2016 and paid no tax, while Shell Energy Holdings Australia – a unit of Royal Dutch Shell – reported $4.2 billion in income and $97 million in taxable income, but paid no tax.
Chevron, operator of the Gorgon and Wheatstone LNG projects, said it expected to pay significant taxes once those projects were running at full tilt. Shell is also a partner in Gorgon LNG.
The Australian Taxation Office (ATO) started requiring big companies to disclose their tax payments two years ago in a push to curb alleged tax avoidance.
Top global miners BHP Billiton and Rio Tinto and the oil and gas giants have all been accused of shifting income to countries like the Netherlands and Singapore where tax rates are lower.
Chevron, operator of the Gorgon and Wheatstone LNG projects, said it expected to pay significant taxes once those projects were running at full tilt. Photo: AP
A probe by the Senate into corporate tax avoidance that began in 2014 was extended this week, and is now due to issue a final report by the end of May 2018.
In New Zealand, the new Labour government on Thursday proposed legislation to prevent multinationals from shifting profits out of the country. Its Tax Office estimated the measures could raise about $NZ200 million a year.
“Multinational companies are a welcome part of our economy but they must abide by the rules. They must pay their fair share of tax,” New Zealand Revenue Minister Stuart Nash said in a statement.
Australia’s and New Zealand’s company tax rates are 30 per cent and 28 per cent respectively. The Netherlands has a 25 per cent rate.
BHP chief executive Andrew Mackenzie defended the company’s tax payments this week, after Australian tax commissioner Chris Jordan was quoted in media reports saying the ATO might take BHP and Rio Tinto to court to resolve questions about marketing hubs in Singapore, where the miners pay minimal tax.
Mr Mackenzie said the fight with the Tax Office related to about 1 or 2 per cent of BHP’s total tax payable in Australia.
“We pay our fair share,” he told the Melbourne Mining Club on Tuesday.
The Tax Office won a landmark case against Chevron earlier this year over a disputed $340 million tax bill stemming from an inter-company loan with an exorbitantly high interest rate.
“On the back of solid growth in company profits and higher commodity prices, we are seeing a strong increase in company tax collections in 2016-17 which will be reflected in the data next year,” Australia’s deputy tax commissioner Jeremy Hirschhorn said in a statement released with the tax data.