The latest ATO report on amounts of company tax paid by large companies in Australia shows that, excluding Canon and Fujifilm, major players in the photographic industry paid something near the company tax rate on taxable income – albeit while running extremely low-margin businesses.
Around a third of these companies – about 600 in all – paid no company tax in 2014/15.
Fujifilm is the only large photo industry company which paid ‘zero or less’ tax in 2014/15. It’s total income was $173 million while its taxable income was a paltry $537,000. It didn’t pay tax in 2013/14 neither, according to the government figures.
Following Fujifilm, the least tax paid by a photographic company was Canon, which had a total income at $780 million, a taxable income of $41.4 million and a tax contribution of a mere $1.26 million. In 2013/14 Canon paid zero or less tax, according to the ATO report, on taxable income of over $40 million.
Canon is now a retail competitor with camera stores via its heavily-promoted Canon Store, of pro shops with its Sun Studios outlets in Sydney and Melbourne, and photo printing businesses with its Photo Pico business. This ability to avoid paying company tax in Australia gives it a clear competitive advantage against other retailers (aka customers), such as Ted’s Cameras and Camera House, who pay company tax at or around the 30 cents in the dollar company tax rate.
Canon distinguishes itself from other companies with its adoption of a corporate philosophy it calls kyosei – which it translates as ‘living and working together for the common good’.
It seems paying company tax in Australia is excluded from Canon’s definition of ‘the common good’!
Its competitors in camera distribution (as opposed to retail) all seem to be paying their way, even though their operating margins are generally little better than bank deposit interest rates! So for instance, Nikon had total income of $134.4 million, taxable income of $9.9 million, and paid $2.9 million in tax. Olympus had $190.4 million total income, $4.6 million in taxable income and paid $1.4 million tax. Sony only managed $6.56 million in taxable income from total income of $1.12 billion, and paid $1.25 million in tax.
Surveying the ATO figures, one surprising stand-out is Black Magic Design. This Melbourne-based designer and manufacturer of broadcast-quality video cameras, software and workstations had total income of $216 million, a handsome taxable income of $38 million and paid $3.5 million in company tax. These incomes are primarily generated from operations in the US, Europe and Asian markets.