Brewers’ corporate tax contributions revealed

Two of Australia’s largest brewers did not pay corporate tax in 2015-16, an Australian Tax Office report says.

The ATO has this month published its Corporate Tax Transparency report for 2015-16, which includes tax information for more than 2,000 large companies – defined as those with annual earnings of more than $100 million – operating in Australia.

The report says Carlton & United Breweries’ owner during 2015-16, SABMiller Australia Pty Ltd, paid no corporate tax that year, when it had total income of $2.18 billion.

Asahi Holdings Australia Pty Ltd also did not pay any corporate tax on total income of about $1.51 billion.

Both the other brewers for whom records were available did make corporate tax contributions during 2015-16.

Lion paid about $111 million on total income of $4.19 billion, of which $427 million was taxable.

Coopers Brewery paid about $12 million on total income of about $241 million, of which about $45 million was taxable.

Controversial report
SABMiller and Asahi were among more than 700 companies in the 2015-16 report that did not contribute corporate tax, which is payable only on profits.

The annual report on corporate tax transparency is now in its third year. It has been strongly criticised by the business community for lacking context around individual companies’ contributions.

“For all the false and misleading ‘companies pay no tax’ commentary, what was missed was the bottom-line finding of the ATO that Australian-based businesses are overwhelmingly complying with their tax obligations,” wrote Australian Industry Group chief executive Innes Willox last year.

“There are clearly legitimate reasons why companies might not pay tax in a particular year. The most obvious is that they made a loss. This is a normal feature of our economy.”

Challenging conditions: SABMiller
SABMiller Australia paid no corporate tax in 2015-16 for the third year running, having previously recorded total income of $3.47 billion in 2014-15 and $2.08 billion in 2013-14.

The company incurred losses in Australia in the years prior to its takeover by AB InBev, according to a legacy report on AB InBev’s website.

“The losses reflect challenging market conditions which have impacted profitability over
timeand funding costs incurred by the business which are associated with the acquisition of the
Foster’s Group,” the report says.

“However, we expect that the business in Australia will generate sufficient taxable profits in future years and therefore the deferred tax asset in relation to these losses has been recognised.”

The report says SABMiller was required to prepay tax (franking deficit tax) ofabout US$42 million to the Australian Tax Office in 2015, which is recoverable against future corporate income tax liabilities.

“While CUB did not pay corporate income tax in 2016, because we were in a tax loss position, our total tax contribution in Australia exceeded $1.4 billion,” a company spokesperson told Brews News.

“Our taxes paid included excise, GST, employment and other state taxes.”

Asahi hit by debt funding

Asahi paid corporate tax of $11.2 million in 2014-15, when it had total income of about $1.5 billion, of which about $62.27 million was taxable.

In 2013-14, the Japanese brewer paid about $5.3 million on total income of about $1.4 billion, of which $38 million was taxable.

“For the year ended 31 December 2015, Asahi Holdings Australia incurred a loss for tax purposes and therefore was not required to pay Australian income tax in relation to that period,” a spokesperson told Brews News.

“The result for FY2015 was impacted by an interest payment totalling $125 million which accumulated on debt funding over several years. The funding was used to finance the acquisitions by Asahi in Australia and New Zealand during 2011.

“Asahi Holdings Australia at all times complies with the applicable tax laws and regulations, pays the correct amount of tax legally due, and works cooperatively with all Revenue Authorities.

“AHA Group also pays a significant amount of other ‘non-income’ taxes in Australia and New Zealand such as: customs duties and excises, GST, payroll tax, Fringe Benefits Tax, land tax, stamp duties, and more.”

Lion and Coopers
Both Lion and Coopers have paid corporate tax for the last three years running, according to the report.

Lion paid approximate corporate tax of $31.7 million in 2014-15 and $43.6 million in 2013-14.

Coopers paid about $10.7 million in 2014-15 and $11.35 million in 2013-14.

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