Agrium SP Holdings Pty Limited
|4 year total income||$8,928,715,959|
|4 year taxable income||$23,566,508|
|4 year margin||0.26%|
|4 year tax payable||$0|
|4 year tax payable||0.00%|
This live exporter takes live sheep out of Australia on boats to the Middle East and live tax dollars out of Australia in interest on loans to Hungary.
The corporate entity behind the Landmark International livestock business is ultimately owned by Canadian multinational, Agrium Inc, and it gets its tax bill down in Australia by striking big loans and “services” deals with its offshore associates.
According to its latest financial statements, there is a $428 million loan from “AFC Hungary Liquidity Management LLC”, a related party, and more than $5 million a year in “management fees” being paid to related parties overseas.
The Hungary loan is priced at 180 BBSY plus 3 per cent and has funnelled $50 million out of Australia over the past two years.
“The Group is not publicly accountable, in the opinion of Directors,” say the accounts, audited by KPMG.
Profit before tax last year was $137 million, on which it paid $4.6 million tax, up from $20,000 the year before so next year’s data dump from the Tax Office may show Agrium paying, finally, a skerrick of income tax.
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We are counting down the Top 40 Tax Dodgers. There are now four 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 new economy 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 all 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 four years.
Qantas, therefore, is not on this list, although it has enormous income and has paid no income tax in Australia for many years. It misses the cut-off due to it not eliminating more than 99.5 per cent of its total income.
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”.
Further explanation of methodology can be found here.
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 this, the second iteration of michaelwest.com.au corporate tax rankings, we have ranked companies 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 not a perfect guide. It does not record refunds, only tax payable and is often at odds with disclosures made for accounting purposes. In some 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 trusts 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.
Hydrox has been taken off the list as it never made a profit.
Michael West established michaelwest.com.au to focus on journalism of high public interest, particularly the rising power of corporations over democracy. Formerly a journalist and editor at Fairfax newspapers and a columnist at News Corp, West was appointed Adjunct Associate Professor at the University of Sydney’s School of Social and Political Sciences. You can follow Michael on Twitter @MichaelWestBiz.