Australia Tax Shake-Up: ATO Reveals 27% of Big Firms Pay Zero Tax 2026

Australia's corporate tax landscape is under scrutiny after the Australian Taxation Office (ATO) revealed that more than one-quarter of big companies paid no income tax in 2024-25. The latest corporate transparency report shows that 27% of large firms reported zero tax, often citing accounting losses. This comes as the government rolls out a major NDIS alternative, the Thriving Kids program, which began today.

ATO Report: One-Quarter of Big Firms Pay Zero Tax

The ATO's latest report highlights that 27% of large companies operating in Australia paid no income tax in the 2024-25 financial year. Most of these companies attributed their zero tax bill to accounting losses, where expenses exceeded revenue. Guardian Australia has previously reported that some multinationals, including Singtel-owned Optus and coal miner Adani, regularly pay no tax, citing infrastructure investments and operating expenses.

This revelation raises questions about corporate tax avoidance and the effectiveness of Australia's tax system. While some companies may have legitimate reasons for zero tax, such as carrying forward losses or investing in infrastructure, the high percentage has sparked debate among policymakers and the public.

Why Do Big Companies Pay Zero Tax?

There are several reasons why large companies might pay no income tax in a given year:

• Accounting losses: When expenses outstrip revenue, companies may have no taxable income.
• Tax offsets and deductions: Companies can claim deductions for investments, research and development, and other expenses.
• Carried-forward losses: Previous years' losses can be used to offset current profits.
• International profit shifting: Some multinationals shift profits to lower-tax jurisdictions.

While these practices are often legal, they reduce the tax revenue available for public services.

NDIS Alternative: Thriving Kids Program Begins

In a significant shift in disability support, the Australian government has launched the Thriving Kids program, an early intervention initiative for children under nine with mild developmental delays and autism. Administered by state and territory governments, the program aims to slowly move children off the National Disability Insurance Scheme (NDIS) and will fully replace it for these children by 2028.

Unlike the NDIS, Thriving Kids won't require a formal diagnosis, potentially speeding up access to services and saving families money. Health Minister Mark Butler has assured parents there will be no gap in government support. However, Queensland is the only state refusing to sign on, leaving families in limbo as the first phase launches.

Thriving Kids vs. NDIS: Key Differences

What This Means for Australian Families and Businesses

For families with children with developmental delays, the Thriving Kids program promises faster, more accessible support. However, the Queensland government's refusal to participate creates uncertainty for families in that state. For businesses, the ATO report underscores the need for transparent tax practices as public scrutiny intensifies.

• 27% of large companies paid zero income tax in 2024-25.
• Thriving Kids program begins today, replacing NDIS for eligible children by 2028.
• Queensland is the only state not participating in Thriving Kids.
• No formal diagnosis required for Thriving Kids, speeding up access.

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