Microsoft’s datacentre business and Optus parent Singtel are among major corporations generating billions in Australian revenue while paying zero income tax, according to the Australian Taxation Office (ATO). The ATO’s 2024-25 transparency database reveals that over a quarter of large companies pay no or little corporate tax in Australia, sparking concerns about profit shifting and tax avoidance.
ATO Transparency Data Reveals Widespread Zero Tax Payments
The ATO’s latest report shows that many multinationals, including Netflix and Brazilian-owned JBS Global Meat Holdings, pay tax on only a fraction of their Australian turnover. JBS, for instance, generated over $4.8 billion in revenue but paid zero tax—a recurring pattern for the global food company. While the ATO does not typically publish individual tax details, it is required by parliament to disclose information for entities earning at least $100 million in Australian income.
The report notes that zero tax payments can be legitimate, due to losses, deductions, or offsets. However, overseas companies often reduce taxable income by making payments to related entities in lower-tax jurisdictions—a practice known as profit shifting that attracts regulatory scrutiny.
Key Companies and Their Tax Contributions
The table below summarises some of the major corporations highlighted in the ATO data.
| Company | Australian Revenue | Tax Paid |
|---|---|---|
| Microsoft Datacentre Business | Billions | Zero |
| Singtel (Optus Parent) | Billions | Zero |
| Netflix | Billions | Small fraction |
| JBS Global Meat Holdings | $4.8bn+ | Zero |
Why Do Companies Pay Zero Tax?
According to the ATO, there are several reasons why a company might pay no tax in a given year. These include:
- Making a loss or having carry-forward losses
- Claiming deductions and offsets
- Using transfer pricing to shift profits to lower-tax jurisdictions
- Benefiting from government incentives
Michelle Sams, acting deputy commissioner at the ATO, emphasised that the transparency data is not evidence of wrongdoing but highlights areas where the ATO may need to investigate further.
Implications for Australian Taxpayers
When large corporations pay little or no tax, the burden falls on individual taxpayers and smaller businesses. This can lead to underfunded public services and increased inequality. The ATO is actively monitoring profit shifting and has been increasing its efforts to ensure multinationals pay their fair share.
FAQ
What is profit shifting?
Profit shifting is an accounting strategy where multinational companies move profits from high-tax jurisdictions to low-tax ones, often through intra-company transactions.
Is it illegal to pay zero tax in Australia?
Not necessarily. Companies may pay zero tax due to legitimate losses, deductions, or offsets. However, if the zero tax results from illegal profit shifting, it is unlawful.
How does the ATO address tax avoidance?
The ATO uses its transparency database to identify companies that may be avoiding tax and conducts audits and investigations to ensure compliance.
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