Wilson Parking appears to suffer from high costs. Credit:Louie Douvis In the wake of the Panama Papers, Fairfax Media and University of NSW accounting academic Jeff Knapp looked into Wilson Parking and found that, like its multinational peers, it enjoys billion dollar revenue but alas makes a lamentably small profit, on which it is subsequently taxed. Running late The company had failed to comply with the Corporations Act and get its financial statements in on time for the past 18 years and we discovered accounting irregularities in the latest 2015 group financial statements. Wilson Parking has also left incorrect details about its ultimate holding company in ASIC's registers for 12 years. And to top it off, Wilson Security has missing annual financial reports with ASIC. It is no small irony that Wilson has its security guards stationed at court houses and the Australian Taxation Office.

A financial analysis on over 14 years of records shows the company's income tax paid is around 1.6 per cent of its revenue. In this, it is typical of multinationals, like Pfizer and VW, operating in Australia. Revenue is soaked up by expenses and the resulting profit involves a smidgen of tax compared with the billion-dollar scale of the business. Wilson Parking Credit:Joe Castro High costs Wilson Parking seems to be burdened by uncannily high costs. On the car-parks it manages, Wilson has only averaged a profit of 5 per cent over 14 years. For all the business risk, on its published numbers, it would have done better to have its money on term deposit at the bank.

"The profit and income tax paid appears to defy economic reality,' says Jeff Knapp. "Why would any entity conduct a billion dollar business if it can only scrape out a 4 per cent or 5 per cent return before tax?" The same might be asked of most multinationals. Some rake their profits offshore by financing costs on loans and by royalties to related entities, and most bulk up their costs in Australia, so as to eradicate as much profit as they can because tax is levied not on revenue but on profit. The name of the game is making as little profit as possible in this country. "These multinationals are not for-profit entities but for-revenue-and-as-little-profit-as-can-be-entities," says Knapp. Virgin Island havens Also, like many of its ilk, Wilson has parent companies in tax havens. There used to be the enigmatic Covert Investments Ltd (incorporated in the British Virgin Islands). Now there is the parent Wilson Parking Holdings Pte Ltd (Singapore), and its ultimate holding companies, Wilson Offshore Group Holdings Limited and Genuine Result Limited, both registered in the British Virgin Islands.

Wilson veritably bristled at the suggestion from these quarters that Australian parking fees might somehow wend their way to the tax sanctuaries of the Caribbean, even threatening to sue should such an imputation be conveyed. "We can categorically state that none of the income that you refer to has in any way been transferred or has in any way 'made its way' to any BVI and/or related entities or associated entities of any entities whatsoever including all the entities that you refer to," said an emailed response to questions. One wonders then what the point is of having BVI parentage if not to hide things. In any case, besides the standard Big Four auditor (PwC), the "irregularities" (as Knapp dubs them), the standard large revenue but small profit and tax numbers and the standard piqued cry, "We comply with all our obligations under the law" (no you don't), there is some colourful accounting. 'Managed park revenue' The most glaring anomaly is the Wilson car parks that are managed for "owners". The parking fees for these managed car parks are referred to as "managed park revenue" but they are not included in the revenue shown in the income statement. Wilson booked revenue of $928 million for 2015 after excluding $200 million for managed park revenue.

It is strange these parking fees are described as revenue in the directors' report but they are not revenue in the financial statements. Wilson argues there is a principal/agent relationship in play. The managed revenue is for other entities that are running a car park business; property trusts and so forth. Over the 14 year period, Wilson notched up $5.1 billion in revenue, not including the unrecognised "managed park revenue" ($2.3 billion), paid income tax of $83.7 million and booked management fees of $117 million (its other carparks are leased or owned). Those management fees equate to about 5 per cent of managed park revenue. In other words, Wilson is happy with $3.30 when you pay $66 at a building owned by a property company. The management fees seem skinny. Moreover, they have not increased with managed park revenue, contrary to what you would expect for an agency relationship. As to other irregularities, Jeff Knapp points to the following: The accounting policy note does not adequately explain why managed parking revenue of $196 million is omitted from the income statement.

There is inadequate disclosure of the amount of each significant category of revenue; $626 million is lumped together as "other – security and patrol services and alarm response".

Reimbursed costs of $29 million are netted off against expenses instead of being included in revenue.

Cash collected for managed parking stations appears to be netted off.

Cash held on behalf of third parties, the owners of the managed parking stations, is not disclosed.

"The nature and extent of the irregularities – especially the late and missing accounts – is concerning" said Knapp. "It is fair to ask whether significant amounts of taxpayer funds should be directed a company that routinely fails to comply with the Corporations Act," he said. So Wilson has been exposed in the Panama Papers, it has huge revenue and low taxes in Australia, says it has a multitude of owners that have car park businesses, and it routinely fails to comply with the Corporations Act. Sadly for Australian taxpayers, Wilson is not alone. It is merely one player in what is a global "Bottom of the Ocean" scheme where multinationals come to these shores, not to make a profit, but to generate large revenues which are then soaked up in high costs. "Multinational tax affairs in Australia are dire and toxic," says Knapp. "The sheer scale and audacity of corporate tax avoidance in our country has to be rooted out. Australian-owned companies that do pay a fair share of income tax deserve a fair go. They should not have to compete against multinational corporate blaggards on an uneven tax field."