Do you pay more tax than the big fossil fuel companies?
For all the environmental and climate destruction wrought by the fossil fuel industry here in Australia and globally, you’d think there must be a significant payback through taxes, right?
Massive fossil fuel companies use all sorts of accounting tricks to minimise the tax they are required to pay, and sometimes they don’t even pay that!
Just check out the table below, which shows the biggest fossil fuel companies and how much tax they have paid compared to their income. In the 2020-21 financial year, 73 of the 134 fossil fuel companies identified  paid no tax, yet racked up a total income of $164 billion in Australia.
What makes this even harder to swallow are the whopping pay cheques and bonuses these companies’ bosses take home, while destroying our environment and contributing nothing to the Australian public purse.
And most of this is perfectly legal under Australia’s taxation laws.
Displayed information has been collated from the eight years of tax data made public by the Australian Tax Office (ATO). This information was last updated 3 November 2022.
Fossil fuel companies paying less than their fair share
|wdt_ID||Company||Sector||Total income||Percent of which paid as income tax|
|1||BHP GROUP LIMITED||Coal||326,609,908,363.00||9.10|
|2||AMPOL LTD||Oil & Gas||192,484,237,962.00||0.40|
|3||BP REGIONAL AUSTRALASIA HOLDINGS PTY LTD||Oil & Gas||181,585,860,229.00||1.30|
|4||GLENCORE INVESTMENT PTY LIMITED||Coal||116,073,612,469.00||1.40|
|5||ORIGIN ENERGY LIMITED||Utilities||110,343,477,482.00||0.40|
|6||AGL ENERGY LIMITED||Utilities||94,018,424,321.00||1.00|
|7||EXXONMOBIL AUSTRALIA PTY LTD||Oil & Gas||82,381,091,222.00||0.00|
|8||SHELL ENERGY HOLDINGS AUSTRALIA LIMITED||Oil & Gas||74,188,119,184.00||1.50|
|9||ENERGYAUSTRALIA HOLDINGS LIMITED||Utilities||58,421,865,120.00||0.90|
|10||WOODSIDE PETROLEUM LTD||Oil & Gas||57,851,826,848.00||2.40|
Data for eight years to FY2021.
Company tax avoidance trends
Several of the largest coal, oil and gas companies in Australia have paid zero or negligible amounts of tax here in the last eight years.
- ExxonMobil has dodged paying tax for an eighth consecutive year. One of the world’s largest oil companies, ExxonMobil is involved in major oil and gas projects in Australian waters, including the climate-wrecking Gorgon LNG project off the coast of Western Australia. This project received $60 million in federal funding for a carbon capture and storage (CCS) initiative that continues to miss its capture targets – eight years after the field started up.
- In this year’s data, we see oil supermajor Chevron make its first contribution in eight years to the Australian public purse, with a whopping $30 paid in tax. Yes – thirty bucks. This pales in comparison to the $75,000 it donated to the Liberal, National, and Labor parties in FY2021, to say nothing of its total income of $72 billion in the last eight years.
- QGC, a subsidiary of Shell, has also avoided paying tax on the $25 billion of income it has received over the last eight years. Shell continues to expand its oil and gas business, for instance by approving the US$2.5 billion Crux gas field off the coast of Western Australia in May 2022, the Jackdaw gas field in the UK in July and the Rosmari-Marjoram gas fields in Malaysia in September. This flies in the face of the International Energy Agency’s warning that no new major oil and gas fields are required if the world is to limit global warming to 1.5°C and avoid climate catastrophe.
The worst offenders forced to pay. What about the rest?
In recent years, the ATO has been tackling some of the most egregious tax dodging. In a 2017 landmark court ruling, Chevron was ordered to pay the ATO more than $300 million in outstanding taxes. After exhausting all its tax deductions in 2021, Chevron is now expecting a 25-fold increase in its tax bill, although still does not anticipate paying any Petroleum Resource Rent Tax for several more years on its enormous Western Australian LNG projects.
Earlier this year, iron ore miner Rio Tinto was slugged with a tax bill of almost $1 billion, partly over its use of a Singapore trading centre to dodge Australian taxes.
A six-year court battle between the ATO and Shell also came to a conclusion in 2019, in which Shell was hit with a $755 million tax bill. These crackdowns are part of a wider push by the ATO to squeeze more tax out of the fossil fuel industry by eliminating deductions and loopholes – as much as $40 billion worth. However, given the ATO only discloses corporate tax data that is 1.5 years out of date (the latest data disclosed is for FY2021), we’ve yet to see this crackdown reflected in the data. In fact, the latest figures make clear these enormous fossil fuel companies were still paying very little or no tax in the year to 30 June 2021.
Tax dodgers Chevron, ExxonMobil and Shell are impacting our climate via their polluting Gorgon LNG project in Western Australia. While the bulk of the project’s emissions come from the burning of gas exported overseas, there are also significant ‘direct’ emissions from the project site. The so-called ‘Gorgon Carbon Dioxide Injection’ scheme has attempted to capture these emissions but failed to meet key targets even eight years after the field started up, and was backed by a $60 million federal government direct subsidy paid for by your tax dollars.
Here are the 10 biggest Australian tax avoiders ruining our chances of a safe climate. Can someone tell @Chevron that paying $30 on billions worth of income still doesn't cut it? See our updated list of the worst tax-avoiding fossil fuel companies here: https://t.co/vtIpgesfnI pic.twitter.com/SCpUBLjc3Y— Market Forces (@market_forces) November 3, 2022
One of the main ways fossil fuel companies minimise or avoid their tax bills is by shifting profits offshore via parent or subsidiary companies.
As tax is paid on profit, rather than revenue, companies can structure themselves so that the bulk of profits are eventually recorded by a subsidiary or parent company that’s registered in low- or no-tax nations (tax havens).
Fossil fuel companies are also able to take advantage of a range of tax breaks that encourage the production or consumption of fossil fuels.
We’ve crunched the numbers on the tax-based fossil fuel subsidies that cost us $10 billion every year. Find out more here!
Footnotes: Fossil fuel companies (including companies providing engineering/field services to the fossil fuel industry) that recorded Australian income in FY2021. The ATO data excludes Australian public and foreign-owned companies with a total income below $100 million and Australian-owned private companies with a total income below $200 million.