EXXONMOBIL has been branded Australia’s worst tax dodger, with a new report revealing the oil giant has made nearly $25 billion over the past three years without paying a cent of corporate income tax.

According to the report by the Tax Justice Network, Exxon uses a complex web of offshore shell companies and complicated high-interest loan structures to artificially reduce its tax payments in Australia.

In effect, the report says, Exxon’s entire Australian operations are owned through the Bahamas, in what appears to be a “Caribbean variation” of the aggressive tax minimisation scheme known as the “Double Irish with a Dutch Sandwich”.

“Exxon is the poster boy for corporate tax dodging,” report author Jason Ward said in a statement. “What this research shows is that ExxonMobil has exploited Australia’s natural resources, made a ton of money and siphoned it all off overseas.

“By using notorious tax havens, high-interest internal loans and related party transactions they’ve sucked the taxpayer dry. ExxonMobil has $54 billion sitting in offshore bank accounts.

“Our research shows that much of that money has been funnelled from Australia through Exxon’s Dutch outfit, and ultimately through their Bahamas subsidiary. But the very idea of Exxon Australia being owned in the Bahamas raises more questions than answers.”

The report also alleges Exxon misled a Senate inquiry into corporate tax avoidance in 2015 by failing to disclose its Dutch ownership when specifically asked to report on related-party transactions with operations in foreign countries.

According to Exxon’s US filings, the ATO has not approved Exxon’s tax filings for nearly a decade. “No wonder the ATO is disputing nearly a decade of returns from this company,” Mr Ward said. “It’s some of the most aggressive tax avoidance I’ve seen.”

In a statement, a spokesman said ExxonMobil Australia was “currently in a corporate income tax loss position, which is attributable to the significant investments being made in Australian oil and gas projects such as the Kipper Tuna Turrum project, Longford Gas Conditioning Plant, Longford Liquids Pipeline and the Gorgon project in Western Australia”.

“We have invested almost $18 billion in Australian oil and gas projects, including investments in the Kipper Tuna Turrum project in the Gippsland Basin, as well as the Chevron-operated Gorgon project in Western Australia, of which ExxonMobil is a 25 per cent joint venture participant,” he said.

“As these multi-billion investments were completed in 2017 and have started production, the amount of tax paid by ExxonMobil Australia is anticipated to increase significantly. Over the next decade, the total tax payable is projected to continue to be in the billions of dollars.”

The spokesman said the rates Exxon Australia paid for intercompany loans were “calculated on an arm’s length commercial basis with rates comparable to what could be achieved on the open market”.

It comes after the Australian Taxation Office on Thursday night released its corporate tax transparency report, revealing 732 large companies — or 36 per cent — paid no tax in the 2015-16 financial year.



In releasing the data, the ATO said there may be “a focus on the number of groups which paid either no tax or small amount of tax relative to gross income”, but that it was “important to remember” that corporate income tax was payable on profits, not gross income, and that in any given year a “significant percentage of even the largest companies make losses, not just for tax purposes, but also for accounting purposes”.

The ATO added that the data reflected tax returns as lodged and did not reflect subsequent compliance activity.

“In the last financial year alone, we issued more than $4 billion in amended assessments relating to prior years to public groups and multinationals, and we have already issued a further $1 billion in amended assessments this financial year,” ATO deputy commissioner Jeremy Hirschhorn said in a statement.

“These amounts are not reflected in the corporate tax transparency data.”

Meanwhile, the Australian Council of Trade Unions was joined by aid groups Oxfam and ActionAid in condemning the latest findings.

“This is nothing short of a national scandal,” ACTU president Ged Kearney said. “This data shows the gulf between the workers and corporations in Australia. Workers are punished for taking industrial action and are finding steady work harder and harder to find. Meanwhile, companies don’t bother to pay tax.”

Oxfam Australia chief executive Dr Helen Szoke said the data showed the “irrefutable need” for the government to take tougher action of corporate tax avoidance. “The intolerable failure of large companies to pay their fair share of taxes is fuelling poverty and the global inequality crisis,” she said.

“In Australia, tax dodging is robbing the public coffers of money which could be used to pay for essential services such as schools, hospitals and public transport.”

Lucy Manne, head of campaigns at ActionAid Australia, said there needed to be greater transparency around ownership structures and tax affairs of multinational companies.

“Right now the government is dragging its heels on the introduction of a public register of beneficial ownership, having missed its August 2017 deadline to take action under the Open Government Partnership,” she said.

“It has also failed to commit to public country-by-country reporting. This is despite both these policies being taken up around the world in the global effort to address tax dodging.”

frank.chung@news.com.au