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Qantas and Virgin Australia paid no federal income tax in 2022–23 due to carried-over COVID-19 losses, a new report from the ATO has found.
In its 10th annual Corporate tax transparency (CTT) report, the Australian Tax Office found that the two major airlines were among 31 per cent of large businesses, or 1,253 companies, which reported no income tax paid for the 2023 financial year.
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This represents a decrease of 5 percentage points from the first CTT report in 2013–14 when 36 per cent of large corporates paid no income tax.
“While there are legitimate reasons why a company may pay no income tax, the Australian community can be assured we pay close attention to those who pay no income tax to ensure that they are not trying to game the system,” said ATO deputy commissioner Rebecca Saint.
Qantas recorded $7 billion in statutory losses during the pandemic, which carried over into the 2022–23 financial year. As forecast in its 2023 Voluntary Tax Transparency Report, the Flying Kangaroo resumed paying income tax in the latter half of the 2023–24 financial year.
“The Qantas Group paid and collected a combined total of $3.3 billion in taxes and fees in FY23, 75 per cent more than in FY22,” the report read.
“This amount comprises the tax component of millions of transactions that the Qantas Group undertakes – from GST, FBT, pay-roll tax through to aviation-specific taxes like the passenger movement charge and other ticket fees and charges levied by Australian governments and airports.
“As a result of the carry forward tax losses that built up through the pandemic, the Group did not pay corporate tax in FY23.”
For its part, while Virgin Australia did generate a statutory profit in the 2023 financial year, its pandemic losses from 2020–22 also generated tax losses which carried over to that year.
The airline paid and collected more than $1.4 billion in combined taxes for the year, as CFO Race Strauss and chief corporate affairs and sustainability officer Christian Bennett laid out in Virgin’s own Tax Transparency Report for 2022–23.
“This amount comprises Australian and foreign consumption taxes (such as GST and VAT), Fringe Benefits Tax, PAYGW, stamp duty and various ticket taxes,” they wrote.
As reported in The Guardian, other large corporations that paid no Australian income tax in 2022–23 included Domino’s Pizza, Mineral Resources, News Australia Holdings, and AGL Energy.
