Statements about Company Tax

Published: 14 February 2018

Statements on company tax

Statements about Company Tax




Date: 14 February 2018

Today’s reporting by the ABC on company tax is an oversimplified analysis of an issue that has

already received wide coverage.

It has been very well publicised that Qantas has not paid company tax because of equally well

publicised financial losses. Once our profits exceed those losses, we’ll start paying company tax


The notion that Qantas shouldn’t argue in favour of company tax cuts because of its financial losses

and resulting tax status is nonsense. And it ignores the benefit to the broader economy that lower

tax rates will bring. As a company responsible for almost 1 per cent of Australia’s GDP, our ability to

keep growing jobs and investing in our people depends on the health of the Australian economy –

and competitive tax rates are key.

Some facts:

• It’s totally false to claim, as some have, that Qantas is not sharing the benefits of its turnaround.

A total of $220 million has been set aside for three rounds of annual bonuses for 25,000 of our

non-executive employees and our recent wage increases of 3 per cent is significantly higher than

inflation. We are creating new jobs, investing in new aircraft and offering training to thousands

of our people.

• Our recent profits have generated large amounts of taxable income for the Australian

Government in the form of almost $200 million in unfranked dividends paid out to our

shareholders since 2016. (Because we are not currently paying any company tax, we don’t have

any franking credits.)

• We have around $950 million of tax losses left to work through and, thanks to the turnaround of

the airline, we expect to return to paying company tax soon. This is entirely consistent with

Australian tax law and similar to tax law overseas. This is explained in our Tax Transparency

Report here.

• There is a tax component to most of the millions of transactions that the Qantas Group

undertakes each year – including GST, fringe benefit tax and payroll tax, right through to taxes

like passenger movement charges. In the 2016/17 financial year, the Qantas Group paid and

collected a combined total of $3.2 billion in taxes, up by 14 per cent on the prior year.



The Virgin Australia Group (including the Tigerair Australia entity) is a major contributor to the Australian economy, as a direct employer of over 10,000 Australians and carriage of over 24 million tourist and business passengers during the 2017 financial year.

In accordance with our Board-approved governance framework, and continuous engagement with the revenue authorities, the Virgin Australia Group is committed to paying the amount of tax assessed under the relevant frameworks in Australia and overseas.

In every transaction undertaken by the Virgin Australia Group, whether it be carriage of passengers, purchase of goods or services or employment of staff, the Virgin Australia Group pays, collects or remits numerous forms of taxes.  These range from Federal taxes like Goods and Services Tax, Fringe Benefits Tax or Fuel and Alcohol Excise; State taxes like Payroll Tax or Stamp Duty; or taxes imposed by the Government directly on others, which are collected and remitted by Virgin Australia Group, such as PAYG withholding on wages, Passenger Movement Charges or Foreign Withholding Taxes.

Due to historical financial performance of the Virgin Australia Group which has seen the Group report net losses, the Group is currently not required to pay Federal Income Tax due to having prior year tax losses. Once these tax losses are fully utilised, VAH will pay income tax on future taxable profits.



For attribution to an EnergyAustralia spokesperson

•             EnergyAustralia has been paying tax monthly since October 2017.

•             Prior to that, the business did not pay tax, reflecting large, accumulated historical losses, compounded by weak wholesale electricity markets and poor operational performance.

•             From 2006 to 2014 EnergyAustralia lost in aggregate around $200 million and had to write-off some $1.9 billion from the value of its assets.

•             In 2014 new senior management was appointed and began a three-year program to improve the operational performance of the business. Subsequently, wholesale electricity markets have improved as the closure of large coal-fired power stations reduced oversupply.

•             It has taken longer than anticipated, but the business has now applied its accumulated losses, improved its operational performance, is consistently profitable and is now paying tax.

•             Based on its size and income, EnergyAustralia is classified as ‘key taxpayer’ by the ATO. This means we work closely with the ATO on our tax affairs to ensure the business is paying all the tax it is required to pay. We were the first energy utility in Australia to register for the government’s Voluntary Tax Transparency Code. Our 2017 report is available on our website.

•             Corporate tax is just one way in which a business contributes to the community. EnergyAustralia contributes to the broader economy as an employer of around 2,500 people in Australia and as a customer for the good and services of hundreds of other businesses around the country. We spend more than $700 million each year on goods and services, more than 97% of which is in Australia.

•             Additionally, with a more sustainable business EnergyAustralia is better able to invest in new supplies of energy to ease pressure on wholesale prices; for example, we have committed to a $1.5 billion program to support new wind and solar farms, are participating in demand response trials, are exploring pumped hydro and energy recovery projects and are studying new gas developments in New South Wales.