ExxonMobil says it doesn’t expect to pay any Australian corporate tax until 2021 | Business

ExxonMobil told a Senate inquiry on Wednesday it did not expect to pay any Australian corporate tax until 2021, meaning it would not have paid the tax for eight years, and was again accused of misleading the inquiry over its links to tax havens.

The oil and gas giant’s Australian tax affairs have faced close scrutiny since the release of an investigation by the Tax Justice Network (TJN) last year that exposed a complex web of hundreds of foreign subsidiaries designed for tax avoidance.

The allegations prompted a fresh hearing of the Senate’s corporate tax inquiry on Wednesday, where unions slammed the company as a “very, very bad corporate citizen”.

ExxonMobil told the inquiry on Wednesday that it did not expect to pay corporate tax in the next three years. It had paid no tax since 2013 because of the “unique” circumstances it was facing, after years of huge capital investment.

It expected not to pay any tax until 2021, because it would offset current losses against its future taxable income.

Last year’s TJN report exposed the company’s web of hundreds of foreign subsidiaries, and showed its Australian operations were ultimately owned by entities in the Netherlands, a nation increasingly known for tax avoidance, and the Bahamas, a jurisdiction with no corporate tax.

The TJN accused the company of using related-party loans between its internal subsidiaries to reduce taxable profits in Australia, an allegation the company strongly denies and describes as “baseless”.

It was one of 732 corporations that paid no corporate tax in the 2015-16 financial year. In fact, the multinational giant has not recorded a taxable income or paid corporate tax in Australia for three years in a row, despite reporting revenue of $9.6bn in 2013-14, $8.5bn in 2014-15 and $6.7bn in 2015-16.

Wednesday’s inquiry heard ExxonMobil had not disclosed its links to the Netherlands or Bahamas entities to either the Australian Securities and Investments Commission or to a previous hearing of the Senate inquiry.

The Tax Justice Network’s Jason Ward, who led the investigation, said Exxon must be punished for the deception.

He said their actions and statements show “complete disrespect” for the committee and the Australian people, and mirrored ExxonMobil’s global track record of “arrogance and disrespect”.

“Exxon did mislead this committee in 2015, and there should be consequences,” Ward told the inquiry on Wednesday. “Why is Exxon continuing to hide the facts?”

ExxonMobil’s chairman in Australia, Richard Owen, flatly denied any attempt to mislead the inquiry.

“The accusation by the Tax Justice Network was that we misled this community,” Owen said. “And I clearly say that we have not misled this community. That we have answered truthfully all the questions that have been put to us.”

“And therefore we find the accusation very disappointing.”

ExxonMobil released new data on its financial affairs and structure to counter what it described as “misinformation” and “innuendo”.

Owen said ExxonMobil had “decades and decades” of paying tax in Australia, including more than $2bn since 2000, averaging $200m a year.

In the 1970s and the 1980s, the company was providing 14% of all government tax receipts, the inquiry heard.

ExxonMobil said it was now in a unique position due primarily to the cost of $21bn in capital investment in Australia over the past decade, including in its operations in the Bass Strait and Western Australia.

Lower prices were driving down income, the company said, and there was a high cost associated with the debt it had taken on to fund its investment.

“We are in a unique period, and expect it to be short-term in our corporate history, with no income tax paid since 2013,” Owen said. “And that’s due to the recovery of invested capital, lower prices that are driving down income, and the cost of debt to fund the significant amount of investment … that we’ve made.”

It had received two related-party loans, one from its US parent company, and another from the Bahamas entity worth $1bn. The company said it used about 2% of the loan to partially deduct from its taxable income.

The inquiry heard the Australian Tax Office had audited ExxonMobil.

After the TJN’s report, ExxonMobile used a submission to the inquiry to accuse Ward of defamation. ExxonMobil has sued outspoken individuals who have criticised it in the United States, the inquiry has heard.

The Labor senator Doug Cameron said it was the first time in 10 years he had seen such a threat, and said he would be “very concerned” if the multinational was trying to intimidate a witness.

Owen denied the statement was meant as a threat. But he said the TJN’s allegations were defamatory and misled the inquiry.

The company has paid the petroleum resource rent tax for its operations in Australia, the inquiry heard. ExxonMobil said it had paid $440m a year for the past 14 years through the PRRT.

But even the PRRT, a royalty scheme, was not achieving fair or adequate returns from companies extracting Australia’s natural resources, the inquiry heard.

Both BHP and ExxonMobile operate a joint venture in the Bass Strait, but ExxonMobil had paid far less in PRRT.

The inquiry heard a lack of transparency with the royalty scheme made it difficult to understand why there was such a divergence.

Source link

Tagged , , , , , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *