Named and ‘shamed’ the big companies that paid no tax. That’s half the story
27% of Australia's largest companies paid no income tax last year — but the ATO says that number means two very different things depending on who you're looking at.
Every year the Australian Tax Office publishes its corporate tax transparency report, and every year the same ritual plays out: journalists tally the names, commentators express outrage, and the companies in question say nothing particularly interesting in response. This year's report covers 4,299 large entities for 2024–25, and finds that 1,149 of them — just over 27 per cent — paid no income tax at all. The number is real. The outrage is only half earned.
A nil tax result is not the same as a tax dodge
The ATO's own acting deputy commissioner said it plainly: a nil tax result does not automatically imply wrongdoing. Companies make accounting losses. They claim legitimate offsets. They invest in capital that attracts depreciation deductions. A manufacturing business that ploughed its operating surplus back into a new facility last year may well have shown no taxable profit while creating real productive capacity — exactly the kind of investment a healthy economy wants to encourage. Treating that outcome the same as a multinational routing royalty payments through a low-tax jurisdiction does nobody any good, least of all the public debate that is supposed to follow.
The proportion of large companies paying zero tax has actually fallen from 36 per cent when transparency reporting began in 2013–14 to 27 per cent today. That is a meaningful trend in the right direction, and it deserves mention before anyone reaches for the outrage dial.
The ATO's Tax Avoidance Taskforce, operating since 2016, has pulled back $36 billion in additional revenue from multinationals and large businesses — which tells you both that the taskforce is doing something useful and that the underlying problem it is chasing is substantial.
Profit-shifting is structurally different — and the ATO knows it
But here is where the story gets more complicated, and more interesting. The cases the ATO is actually worried about are structurally different from a company that reinvested its profits and came out flat. The real problem is profit-shifting: the use of offshore financing hubs, intra-company royalty arrangements, and marketing structures to move taxable income out of Australia before the ATO can get near it. The ATO's Tax Avoidance Taskforce, operating since 2016, has pulled back $36 billion in additional revenue from multinationals and large businesses — which tells you both that the taskforce is doing something useful and that the underlying problem it is chasing is substantial.
The OECD's Global Minimum Tax, which Australia has signed up to along with about 140 other countries, sets a floor of 15 per cent on multinational profits. That helps at the margin, but 15 per cent is still a long way from Australia's 30 per cent corporate rate, and the mechanisms for profit-shifting exist precisely to get below even that floor. AI companies and their data centre arrangements are now on the ATO's watch list, and for good reason: infrastructure-heavy digital businesses can be structured to hold intellectual property offshore, generate royalty flows back to that jurisdiction, and dramatically reduce the profit that shows up in Australia despite doing significant economic activity here.
The pattern is familiar: where there is a gap in the law, a well-resourced company with expensive advisers will find it. This is not a moral failing; it is a predictable response to incentives. The same dynamic operates in the gas sector, where accelerated deductions have long kept effective tax rates well below the headline rate, and it runs through the broader structure of Australian tax design.
The fix is not more lists — it is a tax law that stops rewarding the gap
Which raises the obvious question: why are we still playing whack-a-mole? The ATO runs 100 to 150 audits at any one time — a significant programme, but reactive by design. Each audit chases a structure that already exists. Meanwhile, transparency laws meant to come into force on 1 July were killed off before they could take effect, which means the public has less information now than it was supposed to have.
There is a better frame for this. The government is investing real resources in protecting its systems against AI-enabled threats. That same analytical capability — the ability to process large volumes of structured financial data, identify anomalous patterns, flag transfer pricing arrangements that sit outside normal commercial ranges — could be pointed at the tax code itself. Not to automate prosecution, but to continuously map where the law creates exploitable gaps between its stated intent and its actual effect. The tax code is not a fixed object; it is a set of rules that sophisticated actors probe constantly. The response should be equally dynamic.
The ATO's transparency report is useful. The names it publishes serve a legitimate purpose: they create a record, they enable scrutiny, and they occasionally shift behaviour through reputational pressure alone. But a list of companies that paid no tax is a starting point, not an answer. The real work is distinguishing the builders from the shifters, and then fixing the law so that distinction is not left entirely to case-by-case audit. That is harder than publishing a list. It is also the only version of this story that actually ends differently.
Frequently Asked Questions
Why do large Australian companies pay no income tax?
There are two distinct reasons, and the ATO's own acting deputy commissioner acknowledges both. Some companies pay no tax because they made genuine accounting losses, invested heavily in capital assets, or claimed legitimate offsets — all legal and often economically productive. Others pay no tax because they have used offshore financing hubs, royalty arrangements, or intra-company structures to move taxable income out of Australia before the ATO can assess it.
Is the number of companies paying no tax in Australia getting better or worse?
It is improving. The share of large companies paying zero income tax has fallen from 36 per cent when transparency reporting began in 2013–14 to 27 per cent in the 2024–25 report. That decline is meaningful, though 27 per cent of 4,299 large entities — 1,149 companies — still represents a substantial portion of the large-business population.
What is the OECD Global Minimum Tax and does it fix profit-shifting?
The OECD Global Minimum Tax sets a floor of 15 per cent on multinational profits, and Australia is among roughly 140 countries that have signed up to it. It helps at the margin, but 15 per cent sits well below Australia's 30 per cent corporate rate, and profit-shifting mechanisms exist precisely to get taxable income below even that floor — so the minimum tax reduces the problem without eliminating it.
How much has Australia recovered from multinational tax avoidance?
The ATO's Tax Avoidance Taskforce, which has operated since 2016, has recovered $36 billion in additional revenue from multinationals and large businesses. That figure demonstrates the taskforce is effective, but also signals the scale of the underlying problem it is chasing.
What is profit-shifting and how do companies do it in Australia?
Profit-shifting is the use of legal corporate structures to move taxable income from a high-tax country like Australia to a lower-tax jurisdiction before local authorities can assess it. Common methods include routing payments through offshore financing hubs, charging Australian subsidiaries royalties for intellectual property held in low-tax countries, and using intra-company marketing or service arrangements to reduce the profit that appears on Australian books.