ATO perspectives on large business

The Deputy Commissioner, Large Business and International (Case Leadership), Mr Jim Killaly, has given a speech on the Tax Office’s perspectives on the large business sector.

Interesting points made by Mr Killaly included the following:

• there is a significant concentration of cross-border activity in the large business segment which has intensified with the increasing internationalisation of the Australian economy and the globalisation of capital markets

• around 40% of large businesses are foreign owned and there are various levels of foreign shareholder participation across the remainder

• regarding thin capitalisation, the Tax Office is still examining the impact of the global financial crisis, given that asset values have been adversely affected in many cases

• the Tax Office has implemented a new “manager hub” arrangement to improve the day-to-day support services offered to the top 150 large businesses through the key client manager arrangements

• company tax collections in the large business market are heavily concentrated at the top end — in 2008, the top 10 economic groups accounted for 39% of the large market company collections

• over the 2005 to 2008 financial years, more than 40% of the company income tax returns lodged by large business taxpayers had a tax payable of zero and around half those were showing losses.

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