October 6, 2025 • 13 mins
Netflix. AGL. Virgin Australia. What do these companies have in common?
Well, they generate hundreds of millions of dollars in revenue each year, but paid no company tax in the 2023/24 financial year.
That’s according to the Australian Tax Office’s annual corporate tax report released last which.
So how can this be? We’ll break it down in today’s podcast.
Hosts: Billi FitzSimons and Sam Koslowski
Producer: Orla Maher
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Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Already and this is this is the.
Speaker 2 (00:02):
Daily, This is the daily. Ohs oh, now it makes sense.
Good morning and welcome to the Daily os Is Tuesday,
the seventh of October. I'm Billie fit Simon's. I'm Sam Kauzlowski, Netflix,
AGL and Virgin Australia. What do these companies have in common? Well,
(00:27):
they generate hundreds of millions of dollars in revenue each year,
but they paid no company tax in the twenty twenty
three twenty four financial year. That's according to the Australian
Tax Officers Annual Corporate Tax Report released last week. So
how can this be? We will break down everything you
need to know in today's podcast.
Speaker 1 (00:52):
This topic, Billy, has always fascinated me because it's not
actually even unique to Australia. There are large corporations all
over the world. Every year or so a story comes
out that they paid no corporate tax, and there's this
question of how can you bring in this much money
and not pay tax when you and I pay income
tax and we have an understanding of tax rates, So
(01:15):
why don't we start by exploring the differences though, between
the tax that you and I pay, which is individual
tax and company tax rates.
Speaker 2 (01:22):
Yes, so we all know. You know what tax is.
The most familiar one for all of us would be
the pay as you go tax that comes out of
our paycheck every cycle.
Speaker 1 (01:31):
So that's what.
Speaker 2 (01:32):
Employees pay the government. But what we're talking about today
is what employers pay the government in tax. So that's
the companies and it's called company tax. But the thing
about company tax is that the businesses only need to
pay tax on profits. So it's not what they earn
(01:54):
in revenue each year, it's what they earn in profit.
Speaker 1 (01:58):
So if they take away the dollar figure, that's the
expenses that they laid out that financial year, and they
take that number away from the revenue number, that cream
on the top is the profit exactly.
Speaker 2 (02:10):
And so what's interesting, and I think what is quite
controversial every time this topic comes up, is that you
could have a company that is earning hundreds of millions
of dollars in revenue every year, but if the company
isn't earning a profit, once it takes into account how
much it costs to run the company, that's when they
(02:32):
don't need to pay any company tax. In Australia, and
another thing in Australia, which is kind of recent it
only came about during COVID, is that Australia lets companies
carry forward losses into future years. And so what that
means is that a big loss in one year could
be spread out to reduce tax to zero over several years.
Speaker 1 (02:56):
So let's play that out. So let's say that you
lost one hundred dollars in year one, and in the
second year you made one hundred dollars. You could say
to the tax office that in that second year you
actually broke even, Yes, because you'd lost one hundred dollars
the year before. You're carrying that forward and using it
to deduct from those beautiful profits you made in the
(03:18):
second year, exactly.
Speaker 2 (03:20):
And so it's kind of like a tax loophole, but
also not because it's very legal.
Speaker 1 (03:25):
Yeah, it's above board.
Speaker 2 (03:26):
Yeah, And there are lots of these kind of rules,
like the carry forward rule, that allow companies to structure
their affairs in such a way that they pay little
or no tax for many years. I think one thing
that you can compare it to is tax deductions for
individuals for employees. Think of it like that. But obviously,
once you're dealing with hundreds of millions of dollars. It's
(03:46):
a lot more complex and there are so many more
different rules that apply. And I think what's important to
remember is that there's no suggestion that any of these
big companies have done anything wrong by not paying company tax.
It's completely allowed. But I think it's something that not
many people know about, so it's just a great literacy
(04:08):
angle for us to explain.
Speaker 1 (04:09):
And the other important bit of this chat is to
remember that we're not talking about companies paying no tax
at all across the board. We're talking about the company
tax on profits, but companies still pay other taxes like
payroll tax or GST.
Speaker 2 (04:22):
Yes. I have to admit when I first learned about
this many years ago, and I was like, oh my god,
companies are paying no tax. What the hell? Yeah, And
I was so confused about that. But yes, it's important
to say that's actually not true. We're just talking about
company tax, but things like GST or even payroll.
Speaker 1 (04:39):
Tax, which is normally state based.
Speaker 2 (04:41):
Yes, but companies also have to pay payroll tax, which
is an employer tax that's different to the pay as
you go tax. It's all very complicated, but it's not
true that they're not paying any tax.
Speaker 1 (04:52):
At all the other important part of this discussion. So
you've taken us through this idea that if a company
is operating at a loss, if they're spending more than
they're making, then they're not paying any company tax. That
doesn't necessarily mean the company is failing. I mean, think
about those names that you rolled out at the top, Netflix, AGL,
virgin Those are all brands that are you know, at
(05:15):
least from their boards and CEOs, they're heading in the
right direction.
Speaker 2 (05:18):
Yeah, you know who taught me about this, tell me
you thank you. When I first started working at TDA
and started learning about the world of business and everything,
I remember you telling me that companies don't immediately need
to start making a profit. You know, you're playing a
long game here, and so it is not unusual that
businesses will often operate at a loss in specific years
(05:40):
for good reasons. For example, they might be expanding their
business and they might be planning to make profits or hopefully.
I mean all businesses will be planning to make profits
in a future year, but it might just take a
couple of years to get there.
Speaker 1 (05:53):
Can I add one layer of complexity to that. Yes,
Sometimes even investors or shareholders like on the stock market.
They might actually be disappointed if a company is making
too much profit because it's showing that they're not using
that money to put it in growth opportunities. And a
dollar in the bank can get interest and that's really
(06:16):
good and secure. But a dollar being used by an
innovative company to do something that makes their market share bigger,
that might result in three dollars. And so, yeah, profit
is a really interesting idea.
Speaker 2 (06:28):
Yeah, and I remember the last time that we spoke
about companies paying no company tax on the podcast, we
talked about well for that specific year, we were talking
about Quantus paying no tax, and it was during the
years of COVID and they were operating at big losses.
But now as of this pass report, they are paying
company tax. So it just shows that again, you can
(06:50):
be making a loss one year, the next year you
can be making big profits and again paying company tax then.
Speaker 1 (06:55):
And what investors always want to see is growth and
whatever form that growth is in is very important to them.
Remind us why we're talking about this today though.
Speaker 2 (07:04):
Yeah, So the reason we're talking about this today is
because the Australian Tax Office released its annual Corporate Tax report.
Now that is a report where it covers private and
public companies that are making at least one hundred million
dollars every year. I look to see if the dally
Os was there. Unfortunately, we're not quite there.
Speaker 1 (07:24):
One of these years, one of these years we are
going to be interrogated on the corporate tax report. Not
quite yet.
Speaker 2 (07:29):
So any company that is making one hundred million dollars
or more in revenue in Australia is included in this report,
and it revealed that more than a quarter of these
big companies did not pay any company tax. Now, if
you're not familiar with this kind of story, you might
be thinking that's quite a lot. More than a quarter
of companies in Australia making over one hundred million dollars
(07:51):
a year aren't paying company tax. But that's actually the
lowest percentage of companies paying zero tax in the past decade.
Speaker 1 (08:00):
And when you're talking about these companies that are making
over one hundred million, are these companies that we've heard of,
Are these companies that we engage with or are they
you know, miscellaneous massive maybe mining companies that we don't
have much interaction with as consumers.
Speaker 2 (08:15):
Yeah, so I mentioned some of them at the top.
There was AGL, Virgin. There was also Toll the shipping
company Ticketmaster, one that I'm sure many of us are
familiar with and what I found interesting. So we've mentioned
that the threshold to be included in this report is
one hundred million, but some of these companies are literally
making billions of dollars but they still paid no company tax.
(08:37):
One that we have talked about is Netflix. They made
more than a billion.
Speaker 1 (08:42):
Dollars just in Australia, just.
Speaker 2 (08:44):
In Australia, and justin revenue, again not profit, but they
paid no company tax. And what's interesting and quite controversial,
I think it's safe to say, is that a company
like Netflix, which is a multinational company, they are not
playing around with the rules in tax systems in single countries,
(09:04):
but they also get to play around with it across
all countries that they operate in. So it's a very
different company to something like Virgin Australia.
Speaker 1 (09:14):
So let's spell that out a little bit more.
Speaker 2 (09:16):
So.
Speaker 1 (09:16):
What you're talking about there is the idea that Netflix
Netflix Australia has an Australian company that is fully owned
by Netflix Worldwide and where Netflix Worldwide is registered and
it's based that will have an impact on how much
tax they pay. Yes, got it?
Speaker 2 (09:33):
Okay, And I'm not necessarily saying Netflix, but I'm saying
that some companies, some multinational companies, could be moving profits
or revenues around to pay less tax in certain countries.
Speaker 1 (09:44):
And so this is part of the debate that government,
successive governments, both labor and liberal have had over many
decades now, which is the idea that if you're earning
money from Australians but then sending that money overseas straight away,
that's another way to not pay corporate tax. What should
the rules be there? And no one really has had
(10:05):
a clear answer to that question. I mean one of
the companies that this comes up with a lot is
measure and the number of Australian businesses that spend money
on Facebook ads for example, if you look at the
receipts of those ads, then it'll say Dublin on it
and it goes straight to Ireland and that's where that
business is based out of and so they have to
(10:26):
be accountable to Irish tax laws but not Australian. Now,
it's worth noting that Meta says that they are compliant
with all Australian tax laws, and the ATO is a
very powerful institution in chasing up these companies, and all
of this is above board. And I think that's the
recurring interesting point here, Billy, is that no one's breaking
rules here. The rules are set up to allow for
(10:48):
companies to structure themselves in these ways.
Speaker 2 (10:51):
Yeah, and it's interesting that you bring up that the
ATO is, you know, really focusing on compliance, because that
is the reason that when I mentioned earlier that it
is the lowest percentage of companies paying no company tax.
The reason for that is because they have increased their
investment into making sure that all companies are being compliant.
Speaker 1 (11:13):
And that's through these tax avoidance bodies that they set
up with in the ATO that take forensic examinations of
companies to make sure that they're paying the tax that's
owed to the ATO exactly.
Speaker 2 (11:25):
And investment into that task force has increased in recent years.
And so yeah, like I said, this is the first
time in eleven years. Well I didn't say this stat
this is a new stat So the first time in
eleven years that the number of entities paying no tax
has dropped to below thirty percent, and that number of
eleven years, that's just when this report started, so it's
(11:47):
basically the first time on record that it has dropped
to below thirty percent. So it just shows that it
is working. It is above board, but there is a
real focus on compliance at the moment. It's above board
in terms of this report, right, but as we know,
you know, there are potentially dodgy things happening, not what
we've talked about today, but outside of what we're talking
(12:09):
about today.
Speaker 1 (12:10):
It's an area of the law and of the economy
that people spend their entire lives trying to work through,
work in and work around.
Speaker 2 (12:19):
That we've just tried to explain in a ten minute
podcast on a Tuesday morning, So.
Speaker 1 (12:23):
Possibly go wrong. Billy, thank you so much for taking
us through that very complicated area, but one that always
grabs the headlines and we thought it was worth explaining.
Thank you, and that's all we've got time for you
on today's episode of The Daily OS. We're going to
be back in the afternoon with some headlines. If you've
got any questions left over from this discussion, just shoot
us a dm over on our Instagram. We've got TDA Finance,
(12:45):
our brand new finance newsletter and a good place to
try and break down some extra questions you've got from
today's episode. We'll speak to you later in the afternoon.
Until then, have a great day. My name is Lily
Maddon and I'm a proud Arunda Bunjelung Calkatin woman from
Gadigol Country.
Speaker 2 (13:04):
The Daily oz acknowledges that this podcast is recorded on
the lands of the Gadighl people and pays respect to
all Aboriginal and Torrestrate island and nations. We pay our
respects to the first peoples of these countries, both past
and present.
Already and this is this is the.
Speaker 2 (00:02):
Daily, This is the daily. Ohs oh, now it makes sense.
Good morning and welcome to the Daily os Is Tuesday,
the seventh of October. I'm Billie fit Simon's. I'm Sam Kauzlowski, Netflix,
AGL and Virgin Australia. What do these companies have in common? Well,
(00:27):
they generate hundreds of millions of dollars in revenue each year,
but they paid no company tax in the twenty twenty
three twenty four financial year. That's according to the Australian
Tax Officers Annual Corporate Tax Report released last week. So
how can this be? We will break down everything you
need to know in today's podcast.
Speaker 1 (00:52):
This topic, Billy, has always fascinated me because it's not
actually even unique to Australia. There are large corporations all
over the world. Every year or so a story comes
out that they paid no corporate tax, and there's this
question of how can you bring in this much money
and not pay tax when you and I pay income
tax and we have an understanding of tax rates, So
(01:15):
why don't we start by exploring the differences though, between
the tax that you and I pay, which is individual
tax and company tax rates.
Speaker 2 (01:22):
Yes, so we all know. You know what tax is.
The most familiar one for all of us would be
the pay as you go tax that comes out of
our paycheck every cycle.
Speaker 1 (01:31):
So that's what.
Speaker 2 (01:32):
Employees pay the government. But what we're talking about today
is what employers pay the government in tax. So that's
the companies and it's called company tax. But the thing
about company tax is that the businesses only need to
pay tax on profits. So it's not what they earn
(01:54):
in revenue each year, it's what they earn in profit.
Speaker 1 (01:58):
So if they take away the dollar figure, that's the
expenses that they laid out that financial year, and they
take that number away from the revenue number, that cream
on the top is the profit exactly.
Speaker 2 (02:10):
And so what's interesting, and I think what is quite
controversial every time this topic comes up, is that you
could have a company that is earning hundreds of millions
of dollars in revenue every year, but if the company
isn't earning a profit, once it takes into account how
much it costs to run the company, that's when they
(02:32):
don't need to pay any company tax. In Australia, and
another thing in Australia, which is kind of recent it
only came about during COVID, is that Australia lets companies
carry forward losses into future years. And so what that
means is that a big loss in one year could
be spread out to reduce tax to zero over several years.
Speaker 1 (02:56):
So let's play that out. So let's say that you
lost one hundred dollars in year one, and in the
second year you made one hundred dollars. You could say
to the tax office that in that second year you
actually broke even, Yes, because you'd lost one hundred dollars
the year before. You're carrying that forward and using it
to deduct from those beautiful profits you made in the
(03:18):
second year, exactly.
Speaker 2 (03:20):
And so it's kind of like a tax loophole, but
also not because it's very legal.
Speaker 1 (03:25):
Yeah, it's above board.
Speaker 2 (03:26):
Yeah, And there are lots of these kind of rules,
like the carry forward rule, that allow companies to structure
their affairs in such a way that they pay little
or no tax for many years. I think one thing
that you can compare it to is tax deductions for
individuals for employees. Think of it like that. But obviously,
once you're dealing with hundreds of millions of dollars. It's
(03:46):
a lot more complex and there are so many more
different rules that apply. And I think what's important to
remember is that there's no suggestion that any of these
big companies have done anything wrong by not paying company tax.
It's completely allowed. But I think it's something that not
many people know about, so it's just a great literacy
(04:08):
angle for us to explain.
Speaker 1 (04:09):
And the other important bit of this chat is to
remember that we're not talking about companies paying no tax
at all across the board. We're talking about the company
tax on profits, but companies still pay other taxes like
payroll tax or GST.
Speaker 2 (04:22):
Yes. I have to admit when I first learned about
this many years ago, and I was like, oh my god,
companies are paying no tax. What the hell? Yeah, And
I was so confused about that. But yes, it's important
to say that's actually not true. We're just talking about
company tax, but things like GST or even payroll.
Speaker 1 (04:39):
Tax, which is normally state based.
Speaker 2 (04:41):
Yes, but companies also have to pay payroll tax, which
is an employer tax that's different to the pay as
you go tax. It's all very complicated, but it's not
true that they're not paying any tax.
Speaker 1 (04:52):
At all the other important part of this discussion. So
you've taken us through this idea that if a company
is operating at a loss, if they're spending more than
they're making, then they're not paying any company tax. That
doesn't necessarily mean the company is failing. I mean, think
about those names that you rolled out at the top, Netflix, AGL,
virgin Those are all brands that are you know, at
(05:15):
least from their boards and CEOs, they're heading in the
right direction.
Speaker 2 (05:18):
Yeah, you know who taught me about this, tell me
you thank you. When I first started working at TDA
and started learning about the world of business and everything,
I remember you telling me that companies don't immediately need
to start making a profit. You know, you're playing a
long game here, and so it is not unusual that
businesses will often operate at a loss in specific years
(05:40):
for good reasons. For example, they might be expanding their
business and they might be planning to make profits or hopefully.
I mean all businesses will be planning to make profits
in a future year, but it might just take a
couple of years to get there.
Speaker 1 (05:53):
Can I add one layer of complexity to that. Yes,
Sometimes even investors or shareholders like on the stock market.
They might actually be disappointed if a company is making
too much profit because it's showing that they're not using
that money to put it in growth opportunities. And a
dollar in the bank can get interest and that's really
(06:16):
good and secure. But a dollar being used by an
innovative company to do something that makes their market share bigger,
that might result in three dollars. And so, yeah, profit
is a really interesting idea.
Speaker 2 (06:28):
Yeah, and I remember the last time that we spoke
about companies paying no company tax on the podcast, we
talked about well for that specific year, we were talking
about Quantus paying no tax, and it was during the
years of COVID and they were operating at big losses.
But now as of this pass report, they are paying
company tax. So it just shows that again, you can
(06:50):
be making a loss one year, the next year you
can be making big profits and again paying company tax then.
Speaker 1 (06:55):
And what investors always want to see is growth and
whatever form that growth is in is very important to them.
Remind us why we're talking about this today though.
Speaker 2 (07:04):
Yeah, So the reason we're talking about this today is
because the Australian Tax Office released its annual Corporate Tax report.
Now that is a report where it covers private and
public companies that are making at least one hundred million
dollars every year. I look to see if the dally
Os was there. Unfortunately, we're not quite there.
Speaker 1 (07:24):
One of these years, one of these years we are
going to be interrogated on the corporate tax report. Not
quite yet.
Speaker 2 (07:29):
So any company that is making one hundred million dollars
or more in revenue in Australia is included in this report,
and it revealed that more than a quarter of these
big companies did not pay any company tax. Now, if
you're not familiar with this kind of story, you might
be thinking that's quite a lot. More than a quarter
of companies in Australia making over one hundred million dollars
(07:51):
a year aren't paying company tax. But that's actually the
lowest percentage of companies paying zero tax in the past decade.
Speaker 1 (08:00):
And when you're talking about these companies that are making
over one hundred million, are these companies that we've heard of,
Are these companies that we engage with or are they
you know, miscellaneous massive maybe mining companies that we don't
have much interaction with as consumers.
Speaker 2 (08:15):
Yeah, so I mentioned some of them at the top.
There was AGL, Virgin. There was also Toll the shipping
company Ticketmaster, one that I'm sure many of us are
familiar with and what I found interesting. So we've mentioned
that the threshold to be included in this report is
one hundred million, but some of these companies are literally
making billions of dollars but they still paid no company tax.
(08:37):
One that we have talked about is Netflix. They made
more than a billion.
Speaker 1 (08:42):
Dollars just in Australia, just.
Speaker 2 (08:44):
In Australia, and justin revenue, again not profit, but they
paid no company tax. And what's interesting and quite controversial,
I think it's safe to say, is that a company
like Netflix, which is a multinational company, they are not
playing around with the rules in tax systems in single countries,
(09:04):
but they also get to play around with it across
all countries that they operate in. So it's a very
different company to something like Virgin Australia.
Speaker 1 (09:14):
So let's spell that out a little bit more.
Speaker 2 (09:16):
So.
Speaker 1 (09:16):
What you're talking about there is the idea that Netflix
Netflix Australia has an Australian company that is fully owned
by Netflix Worldwide and where Netflix Worldwide is registered and
it's based that will have an impact on how much
tax they pay. Yes, got it?
Speaker 2 (09:33):
Okay, And I'm not necessarily saying Netflix, but I'm saying
that some companies, some multinational companies, could be moving profits
or revenues around to pay less tax in certain countries.
Speaker 1 (09:44):
And so this is part of the debate that government,
successive governments, both labor and liberal have had over many
decades now, which is the idea that if you're earning
money from Australians but then sending that money overseas straight away,
that's another way to not pay corporate tax. What should
the rules be there? And no one really has had
(10:05):
a clear answer to that question. I mean one of
the companies that this comes up with a lot is
measure and the number of Australian businesses that spend money
on Facebook ads for example, if you look at the
receipts of those ads, then it'll say Dublin on it
and it goes straight to Ireland and that's where that
business is based out of and so they have to
(10:26):
be accountable to Irish tax laws but not Australian. Now,
it's worth noting that Meta says that they are compliant
with all Australian tax laws, and the ATO is a
very powerful institution in chasing up these companies, and all
of this is above board. And I think that's the
recurring interesting point here, Billy, is that no one's breaking
rules here. The rules are set up to allow for
(10:48):
companies to structure themselves in these ways.
Speaker 2 (10:51):
Yeah, and it's interesting that you bring up that the
ATO is, you know, really focusing on compliance, because that
is the reason that when I mentioned earlier that it
is the lowest percentage of companies paying no company tax.
The reason for that is because they have increased their
investment into making sure that all companies are being compliant.
Speaker 1 (11:13):
And that's through these tax avoidance bodies that they set
up with in the ATO that take forensic examinations of
companies to make sure that they're paying the tax that's
owed to the ATO exactly.
Speaker 2 (11:25):
And investment into that task force has increased in recent years.
And so yeah, like I said, this is the first
time in eleven years. Well I didn't say this stat
this is a new stat So the first time in
eleven years that the number of entities paying no tax
has dropped to below thirty percent, and that number of
eleven years, that's just when this report started, so it's
(11:47):
basically the first time on record that it has dropped
to below thirty percent. So it just shows that it
is working. It is above board, but there is a
real focus on compliance at the moment. It's above board
in terms of this report, right, but as we know,
you know, there are potentially dodgy things happening, not what
we've talked about today, but outside of what we're talking
(12:09):
about today.
Speaker 1 (12:10):
It's an area of the law and of the economy
that people spend their entire lives trying to work through,
work in and work around.
Speaker 2 (12:19):
That we've just tried to explain in a ten minute
podcast on a Tuesday morning, So.
Speaker 1 (12:23):
Possibly go wrong. Billy, thank you so much for taking
us through that very complicated area, but one that always
grabs the headlines and we thought it was worth explaining.
Thank you, and that's all we've got time for you
on today's episode of The Daily OS. We're going to
be back in the afternoon with some headlines. If you've
got any questions left over from this discussion, just shoot
us a dm over on our Instagram. We've got TDA Finance,
(12:45):
our brand new finance newsletter and a good place to
try and break down some extra questions you've got from
today's episode. We'll speak to you later in the afternoon.
Until then, have a great day. My name is Lily
Maddon and I'm a proud Arunda Bunjelung Calkatin woman from
Gadigol Country.
Speaker 2 (13:04):
The Daily oz acknowledges that this podcast is recorded on
the lands of the Gadighl people and pays respect to
all Aboriginal and Torrestrate island and nations. We pay our
respects to the first peoples of these countries, both past
and present.
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Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.