A Senate committee will investigate ExxonMobil’s Australian tax records following revelations the oil and gas company paid no corporate income tax in Australia for at least two years.
Public records released by the Australian Tax Office (ATO) show ExxonMobil Australia reported no taxable income and paid no corporate tax in 2013-14 and 2014-15, despite reporting an annual income of $9.6bn and $8.5bn respectively.
For the same period, Woodside, an Australian-owned oil and gas company with a slightly lower total income than ExxonMobil and a declared taxable income of $4.8bn from 2013-2015, paid $1.1bn in Australian corporate tax.
The Senate committee inquiry into corporate tax avoidance is expected to announce on Tuesday that it plans to extend its hearings to examine ExxonMobil’s records, after three trade unions announced the findings of a report on the company’s conduct.
The report, by Tax Justice Network’s Jason Ward, cited the company’s US filings that showed it had US$54bn in “indefinitely reinvested, undistributed earnings” in offshore holdings. It traced its ownership though the Netherlands to the Bahamas, where, according to the Paradise Papers, it has 575 subsidiaries, including three directly linked to Australia.
Exxon’s 2016 filings with the US Securities and Exchange Commission also state the ATO was still examining its Australian tax filings from 2008 to 2016.
Ward said ExxonMobil also had $18.5bn in offshore-related party loans and suggested it was “more aggressive” in pursuing this policy than fellow oil and gas company Chevron, which reached a reported $1bn settlement with the ATO after the federal court found against it in a landmark profit-shifting decision in April.
Chevron had $42bn in related party debt, while Exxon has $18.5bn in consolidated related party debt. Exxon made $1.2bn in debt repayments in 2016, amounting to 1.7% of its total revenue.
“The scale of Exxon is significantly smaller than Chevron, but it looks like they are even more aggressive in their tactics,” Ward told Guardian Australia.
In a 2015 submission to the Senate inquiry on tax avoidance, Exxon said the ATO was reviewing its international related-party financial dealings. “We are not aware of any negative finding by the ATO in respect of these dealings,” it said.
Ward also suggested Exxon had failed to disclose its offshore ownership structure.
The ATO began publicly releasing corporate tax data only two years ago. Data for the 2015-16 financial year is expected to be released on Friday. The full Tax Justice Network report is also expected to be released on Friday.
New South Wales Labor senator Jenny McAllister, who sits on the committee, said it was her “strong view” the committee should examine allegations Exxon “engaged in aggressive corporate tax avoidance”.
“If true, reports that Exxon can simultaneously report a total $18bn of revenue, whilst paying no corporate tax sound implausible,” McAllister said, in a statement to Guardian Australia. “I am also concerned about the company’s attempts to slash the wages and conditions of the workers who do the work that allow them to record such healthy returns.”
The Electrical Trades Union, Australian Manufacturing Workers’ Union, and Australian Workers’ Union presented the findings in Canberra on Monday. Unions have been engaged in a long-running dispute with Exxon subsidiary Esso and contractor UGL over the wages and conditions at its Bass Strait operations.
Ged Kearney, the president of the Australian Council of Trade Unions, said the report showed Australia’s tax rules were “broken”.
“We need to change the rules so that parliamentary intervention is not required to get a company to pay its taxes and working people are not forced out of decent, paying jobs,” Kearney said.
In a statement, a spokesman for ExxonMobil said the union’s protest against the company “continues to provide misinformation about ExxonMobil”.
“ExxonMobil Australia’s entities have made a significant contribution to the Australian economy through the reliable supply of energy to fuel economic growth, as well as through direct tax and royalty payments to state and federal governments,” he said.
The statement did not address the information in publicly available ATO data, which showed zero Australian corporate income tax paid in 2013-14 and 2014-15.
It went on to summarise a document titled “tax facts” linked from the front page of ExxonMobil Australia’s website, which said it paid more than $2bn a year in total taxes and stood behind its returns positions. “We hold a documented, longstanding reputation with tax authorities for integrity and professionalism,” it said.
The statement also said Exxon had paid $12bn in the petroleum resource rent tax over its Gippsland Basin and Bass Strait operations, managed by Esso, since that tax was introduced in 1990. Those payments are listed in the ATO’s database.
It said it experienced a corporate income tax loss in 2016 and “expect to continue to be in an income tax loss position in the short term while the significant recent investment we have made generates sufficient income streams to offset past losses.”