Despite being named as a key company that paid no corporate tax in the 2015-2016 financial year, Alcoa, which operates Portland’s aluminium smelter, appears to be doing the right thing, an expert says.
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Media reports name-checked Alcoa after the Australian Tax Office released its latest corporate tax transparency report, with Alcoa Australia Holdings (AAH) listing a total income of $136,079,766 with no tax paid.
However, Alcoa insists its set-up is legitimate, with AAH holding 60 per cent of the shares in Alcoa of Australia, which paid more than $307.5 million in tax in the same year.
Sinclair Wilson Warrnambool tax principal Sean Delaney said Alcoa’s tax set-up appeared to be a “fairly standard arrangement”.
“When the first company pays tax on its profits it gets a credit,” he said.
He said the credit applied to the holding company, which resulted in the zero tax figure.
Alcoa spokeswoman Jodie Read said the company’s effective tax rate for the 2015-2016 financial year was 29.5 per cent, and said 75 per cent of the company’s annual revenue stayed in Australia.
Earlier this year, the smelter received a support package to continue operating for four more years, with $30 million from the federal government and an undisclosed amount from the state government estimated to be up to $200 million.
A state government spokesman said the smelter was the largest employer in Portland and played an important role in the region and the broader Victorian community.
“The smelter is vital to Victoria’s economy – we made sure the region did not lose out following last year’s power outage,” he said. “Keeping workers in jobs and supporting manufacturing is one of our priorities and that’s exactly what we did here.”
Alcoa owns 55 per cent of the Portland smelter, with CITIC Nominees and Marubeni Aluminium Australia each owning a 22.5 per cent share.
