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Virgin Australia again paid no income tax in 2024 due to carried-over losses, while Qantas returned to paying income taxes, the ATO has said.
The Flying Kangaroo in FY2023–24 exhausted its pandemic-related carry-over losses and paid $24 million in tax in the latter half of the year, while Virgin says it expects to begin paying income tax again in FY25–26 once its own carry-over losses have run out.
This followed the two major airline groups both paying zero income tax in 2022–23 due to the massive losses each sustained during the height of the COVID-19 pandemic.
In its Voluntary Tax Transparency Report 2024, Qantas said it anticipated its corporate tax payments to “increase significantly” in 2025.
“In addition, the group collected and passed $3.3 billion in GST, income tax, and aviation-specific taxes such as the Passenger Movement Charge,” the airline wrote.
“The taxes collected and paid are one part of Qantas’ overall economic contribution to Australia. In FY24, the group carried more than 50 million passengers, uplifted more than 200,000 tonnes of freight and employed more than 29,000 people.
“As a result of its activities, Qantas contributes an estimated $14.1 billion to the national economy, representing approximately 0.6 per cent of Australia’s GDP. Further, it facilitates an additional $14.9 billion through tourism expenditure across Australia.”
In its own report for 2024, Virgin said it had generated $576.0 million of taxable income in Australia in that financial year.
“Notwithstanding this, in accordance with Australian taxation law, these taxable profits were reduced to nil due to the application of carried forward income tax losses. As at 30 June 2024, Virgin Australia has cumulative carried forward income tax losses of $514.8 million,” it said.
“Virgin Australia expects to pay income tax in Australia in FY26, once all carried forward income tax losses have been extinguished.”
Virgin nonetheless paid and collected $1,203.3 million of combined taxes in FY23–24, including “Australian and foreign consumption taxes (such as GST and VAT), income tax (Samoa), Fringe Benefits Tax, PAYGW, stamp duty and various ticket taxes”.
The news comes as the percentage of companies that paid no income tax in Australia dropped to 28 per cent in 2023–24, down from 31 per cent in the previous year. This was the lowest percentage in 11 years of the Australian Taxation Office’s Corporate tax transparency (CTT) report.
“Australia has some of the highest levels of tax compliance of large business in the world with 94.1 per cent of tax paid voluntarily, and 96.3 per cent after ATO’s compliance actions,” said ATO assistant commissioner Michelle Sams.
“While there are legitimate reasons why a company may pay no income tax, the Australian community can be assured we pay close attention to those who don’t pay corporate tax and ensure that they are not gaming the system.
“Continued investment in the Tax Avoidance Taskforce bolsters our efforts to identify and take action against those companies that don’t pay the right amount of tax.”
Australia brought in a combined total of $95.7 billion in corporate income tax in 2023–24 across all 4,110 companies listed in the report, with the biggest single tax bill coming from mining giant Rio Tinto, at $6.3 billion.
