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HP “paid no Australian tax” in 2014

December 18, 2015

HP's new site in Australia (Credit: News.com.au)

HP’s new site in Australia (Credit: News.com.au)

A transparency report from the Australian Taxation Office (ATO) showed that the OEM’s subsidiary “did not pay any tax” during the 2013 to 2014 financial year.

The report was discussed by ZDNet, which outlined that 38 percent of Australian and foreign public companies – including foreign private entities – “did not pay tax in 2014”, including HP Inc’s subsidiary Hewlett-Packard South Pacific. The OEM globally reported net income at the time of AU$1.3 billion ($929 million/€859 million) but “did not pay any tax”, according to the ATO’s corporate tax transparency report.

In response to the report, Hewlett Packard Enterprise – which is one of the two new companies, including HP Inc, that were formed after the split – commented that the OEM “adheres to the highest ethical standards and maintains a culture of cooperation with all regulatory authorities”. Before the split, in that same financial year, HP had made a loss of AU$152 million ($108 million/€100 million) as well.

The OEM was not the only company named in the report as having paid no tax, with other technology OEMs named including Toshiba, Acer and Nokia. ZDNet noted that companies can “reduce their taxable income by carrying forward losses” without resorting to what it calls the “Double Dutch Irish Sandwich technique”, where companies “funnel money through countries outside of Australia to pay very low taxes domestically”, even if they earn “significantly high” revenues there.

The ATO did however qualify that 63 percent of those named “reported a loss to their shareholders” in that financial year, with over 20 percent making an accounting loss in “any given year”, and Tax Commissioner Chris Jordan stressed to the site that “no tax paid does not necessarily mean tax avoidance. Publishing this data is a step forward in improving corporate tax transparency.

“Most large corporates, particularly domestic Australian companies, meet their tax obligations, notwithstanding that we do have some significant disputes with some of them”. The laws in Australia have been changed to allow the government to increase penalties for tax evasion by “multinational companies”, with those found to be avoiding paying needing to “pay back the tax owed, plus a 100 percent penalty”.

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