Australia's largest companies haven't paid corporate tax in 10 years

[davidc4430]

Tax-free billions: Australia's largest companies haven't paid corporate tax in 10 years

http://www.abc.net.au/news/2018-02-14/corporate-tax-australian-companies-havent-paid-in-10-years/944...

so why is the govt hell bent on reducing tax rates on big business when they dont pay it anyway?

[lyndal1838]

Just because a company does not pay corporate tax it does not mean that they do not pay any tax at all.

We have a very small company (in comparison to the companies being mentioned) and we pay no Compny Tax but we still pay the government 25% of the company income in the form of personal tax and GST.

[brerrabbit585]

If they're public companies that are owned by shareholders, the companies themselves shouldn't have to pay tax, only the shareholders. If the companies paid taxes and then the owners (shareholders) paid tax on the profit then it'd be double dipping by the govt. If they never pay dividends to the shareholders/owners, that's another matter.

[lyndal1838]

If a company pays dividends to shareholders and they have already paid company tax the shareholder gets a statement of the Fully Franked amount which means that the shareholder gets a credit for the tax already paid on the dividend so there is no double dipping.

If the company has not paid any tax then the shareholder is responsible for paying tax at their marginal rate.

[davidc4430]

---

@lyndal1838wrote:

Just because a company does not pay corporate tax it does not mean that they do not pay any tax at all.

We have a very small company (in comparison to the companies being mentioned) and we pay no Compny Tax but we still pay the government 25% of the company income in the form of personal tax and GST.

---

so your business does pay tax? yes?

does it not upset you huge companys like quantas can reduce their tax to nothing using various legal means?

if companys like quantas were to pay a fair amout of tax per year would australia be better off or worse off?

[lyndal1838]

No David, our Company does not pay tax.

After the usual business deductions and GST are taken into account the rest of the company income is distributed in the form of staff wages.  

As with everyone else the staff wages are subject to tax at each person's marginal rate.

It would be basically the same with the large companies being discussed in the article.  Think of the number of employees who are getting wages from Qantas and translate that into personal income tax going to the ATO....and then say that the company gives nothng to the ATO.   Not company tax but tax nevertheless.  Most of the large companies would have huge wages bills so the ATO is not missing out.

Unless you understand how our tax system works it may be better to say nothing.

[davidc4430]

---

@lyndal1838wrote:

No David, our Company does not pay tax.

After the usual business deductions and GST are taken into account the rest of the company income is distributed in the form of staff wages.  

As with everyone else the staff wages are subject to tax at each person's marginal rate.

It would be basically the same with the large companies being discussed in the article.  Think of the number of employees who are getting wages from Qantas and translate that into personal income tax going to the ATO....and then say that the company gives nothng to the ATO.   Not company tax but tax nevertheless.  Most of the large companies would have huge wages bills so the ATO is not missing out.

Unless you understand how our tax system works it may be better to say nothing.

---

ok, so if business (including yours) pays no tax why on earth do you need a lower company tax rate?

please explain?

i'm not getting it at all.

[lyndal1838]

Not all companies pay no company tax.

In our case, if the company tax rate falls it may be in our interests to pay company tax at whatever the rate is rather than personal tax.  Currently my OH and I pay a lower marginal rate of tax than the company tax rate....not much lower but enough to make it worth while.

If our wages go up we will have to pay more tax and higher worker's compensation payments so do not want our wages to go up.

Also, if we do have to pay company tax we will be subject to provisional tax...meaning that we have to make regular payments to the ATO at the rate that they determine even if the company income falls and we are entitled to get money back.

As our accountant said....better to avoid company tax until out personal tax rates are higher than or equal to the company tax rate.

And we are getting very close to that after the last decrease in the company tax rate.

[davidc4430]

well as a normal tax paying person my thoughts are,

wouldnt it be great if everyone could minimise their tax down to nothing.

of course that would mean the country would go broke i suppose but hey, i'd have more money.

all the things govt uses our tax money for would have to end, but hey, i'd have more money.

dunno, just seems to me somewhere along the line some of us have decided NOT paying tax is OK cos it means we/they have a bit more money.

yes i know, if all those who are NOT paying tax were to pay tax then the country would implode. its the scare tactic that gets rolled out everytime anyone says "but its not fair i must pay my tax but richpants over there doesnt"

[lyndal1838]

You really do not get it do you David?

Company tax and personal tax are paid in exactly the same way.....tax is paid on the income (of the person or company) that is left over after all deductions are accounted for.

Are you saying that you don't minimise your tax by claiming all the deductions you are eligible to claim?

Or do you think company tax should be paid regardless of any deductions?