In the latest corporate tax disclosures from the Australian Tax Office, it was revealed that neither of Australia’s two major brewers paid corporate tax last year.
According to the disclosures, of the four brewing-related businesses listed neither Lion nor Carlton and United Breweries’ then-parent company AB InBev paid tax in the 2018-19 period.
ABI Australia Holdings, trading as AB inBev, is reported as having total revenues of $4.4 billion, of which $320.4 million was taxable income, but paid no corporate tax.
This is the sixth consecutive year that AB InBev has not paid this tax in Australia.
Kirin-owned competitor Lion Pty Ltd paid tax for every year that the ATO has undertaken the report except for the 2016-17 period. Back then, Lion changed its year-end from 30th September to 31st December, so it was not required to file the ATO’s forms, according to the brewery.
However Lion has not paid tax in the 2018-19 year, despite revenues totalling $3.3 billion with taxable income of just under $10 million.
According to a Lion spokesperson, the company’s tax payable was $3 million, which they said equated to 30 per cent of its $10 million taxable income.
“This was reduced by $3 million due to tax offsets relating to taxes already paid – and so net tax payable disclosed in the tax return was reduced to nil,” they told Brews News.
“These offsets included franking credits from dividends received and credits for foreign taxes paid so that the income recognised in Australia was not double-taxed.”
During the year, Lion’s Dairy & Drinks business was the subject of a sale process, and it was written down by $530 million. Lion said in its annual tax transparency report that it made an operating loss after tax for the period of $476.7 million, driven by this impairment.
Lion is the only one of the four brewers listed in the disclosures to have signed up to the voluntary Tax Transparency Code.
Comparatively, Coca Cola Amatil, owner of Feral Brewing Co. but largely focused on non-alcoholic soft drinks, reported a similar total revenue to Lion, at $3.3 billion. However, it had taxable income of $254.3 million and paid $68.7 million in corporate tax.
Coopers’ revenues totalled $258.9 million in 2018-19. Of this, $23.2 million was taxable income and it paid $6.8 million in corporate tax.
Coopers makes its accounts publicly available every year, and this year reported a continued growth trajectory following a move to cans.
Asahi, which purchased CUB this year, was also listed in the disclosures. The ATO reported that the Japanese-owned company’s total revenues reached $1.6 billion for the year, and had taxable income of $37.9 million. It paid $7.1 million in tax for the year.
It is the sixth annual report on corporate tax transparency based on the 2018-19 income tax returns of some of the largest corporate entities operating in Australia, including public and foreign-owned entities with a total income of $100 million or more.
The figures in isolation give the impression that multinational companies pay far less tax than Australian-owned breweries.
However, the ATO has previously been criticised for the lack of information available under the disclosures. Additionally, corporations, particularly those that are foreign-owned entities, have complex accounting frameworks in place which make an accurate analysis of their tax affairs difficult.
This year, the ATO has also considered a number of matters under its diverted profit tax, which aims to ensure that the tax paid by multinational companies “properly reflects the economic substance of their activities in Australia” and prevent the diversion of profits offshore through arrangements involving related parties.