Global environmental services giant Veolia paid no corporate tax in 2023–24 under its new Australian holding company, despite earning $1.1 billion in total income, citing “legitimate tax deductions designed to encourage investment and innovation in local communities”.
Among the company’s recent Australian investments in the past year is a joint venture for the proposed Maryvale Energy from Waste plant in Gippsland, a project that has drawn controversy in Hampton Park and the surrounding community, as reported by Star News before.
While Veolia did not confirm whether the investment fell within the 2023–24 financial year, the company stated that its substantial research and development and infrastructure projects contributed to the tax deductions, resulting in Veolia Holdings Australia Pty Ltd having no tax payable for that period.
While Veolia is publicly listed in Europe, its Australian operations are privately held with limited financial information disclosed.
The waste giant confirmed that they “did in fact pay corporate tax amounting to 20 per cent of their tax expense across their waste and energy operations after claiming research and development credits”, and “the part of their business under Veolia Holdings Australia was one of the few exceptions that didn’t have a tax bill in the 2023-24 financial year”.
Due to sensitivity, Veolia is unable to share the exact tax number they paid under other entities of their business for the 2023-24 financial year.
According to the Australian Taxation Office (ATO)’s latest Corporate Tax Transparency (CTT) report published last week, Veolia Holdings Australia Pty Ltd, the company’s major entity, declared $1.16 billion in total income and $13 million in taxable income, but no corporate tax bill.
The CTT report includes all corporate tax entities with total income of $100 million or more, whether private or public.
Many large corporate groups consist of smaller entities whose aggregated total income does not meet the transparency report threshold, but that doesn’t mean no tax is paid.
Veolia has two other entities that made the list: Veolia Water Australia Pty Ltd, and Veolia Water Technologies & Solutions Process Australia Pty Ltd.
Veolia Water Australia Pty Ltd declared $406 million in total income, $4 million in taxable income, and no tax bill.
Veolia Technologies & Solutions Process Australia Pty Ltd declared $136 million in total income and no taxable income.
Those three entities under Veolia are among roughly 1,150 (28 per cent) of the 4,110 entities that reported no corporate tax payable for the 2023-24 financial year.
According to ATO, there can be legitimate reasons why entities do not pay tax, for example, they have an accounting or tax loss, or they utilised tax offsets or losses from previous years.
Assistant Commissioner Michelle Sams said while there are legitimate reasons why a company may pay no income tax, the Australian community can be assured that they pay close attention to those who don’t pay corporate tax and ensure that they are not gaming the system.
In a statement to Star News, a Veolia spokesperson said there are three reasons why this particular entity, Veolia Holdings Australia Pty Ltd, had no tax liability for that financial year.
“First, some parts of the newly combined business carried forward tax credits from previous years,” they said.
“Second, our substantial investment in research and development earned us legitimate R&D tax credits.
“Third, we reinvested our profits in building infrastructure, to the tune of about $300m a year.
“We’re a growth company that puts profits back into the business, rather than extracting them.”
Examples of recent investments, developments and R&D in Australia over the past year alone include Acquisition of Orontide in WA, completion of a materials recovery facility (MRF) in Tasmania, starting another MRF in the ACT, installing Australia’s first robot arm at an MRF in WA, joint venture for the construction and operation of the proposed Maryvale energy from waste plant, constructing an advanced soil washing plant in Hampton Park, and major renewable energy upgrades across every part of the business.
The new holding company was established following Veolia’s 2022 acquisition of waste business Suez, which prompted a restructure of Australian corporate entities for FY 2023-2024.
“Veolia undertook a strategic plan to simplify several separate tax groups into one for greater operational efficiency, including those from the Suez merger,” the spokesperson said.
“As a consequence, Veolia Recycling & Recovery Holdings ANZ Pty Ltd was moved under Veolia Holdings Australia Pty Ltd tax group from 1 January 2024.”
The spokesperson said it is an Australian business serious about paying any tax that is owed.
“When you consider our total contribution – corporate taxes across all of our business units, plus the taxes we collect on behalf of state governments through landfill levies, payroll taxes, and other mechanisms – we’re making a substantial contribution to public revenue every year,” they said.
