MEDIA RELEASE
MARITIME UNION OF AUSTRALIA
1 NOVEMBER 2023
Eight years tax free in Australia:
Dubai Ports robs all Australians by paying zero tax
International tax dodgers continue to flourish in Australia, with a new analysis published by the Centre for International Corporate Tax Accountability and Research (CICTAR) revealing that Australia's second largest operator of container terminals throughout Australia, Dubai Ports (or DP World on its signage), has successfully structured its local and international operations to avoid paying any Australian corporate tax.
DP World generates billions of Australian dollars through four ports in Sydney, Brisbane, Melbourne and Perth, delivering hundreds of millions in Australian profits for the global parent company, owned by the Dubai Government.
CICTAR's analysis demonstrates that Dubai Ports' global structure is well engineered for tax avoidance throughout the world, with each local subsidiary owned by a Matryoshka Doll of shell companies but which ultimately are owned almost entirely by the Dubai Government.
Dubai Ports acquired the entire global ports operations of former maritime behemoth P&O in 2006, including four Australian container terminals, and now owns much of the Australian operations and assets through holding entities registered to a Post Office Box in the Cayman Islands at the notorious Ugland House - an address once described by former United States President Barack Obama as the home of 'the largest tax scam in the world'.
"Dubai Ports have been reaping billions from their Australian operations yet giving nothing back to the Australian community. They pay no tax and are presently trying to cut the pay of their Australian workforce by up to 32%," said Adrian Evans, the MUA's Assistant National Secretary.
Over the past eight years, Dubai Ports in Australia has generated AUD$4.5 billion in revenue (2013/14 - 2020/21) and amassed over $2.4 billion in assets, yet over the same period has paid zero Australian corporate income tax.
This is not to suggest that the Dubai Government owns a failing or even flailing business here in Australia. The wealthy nation can rest assured that its investment in Australian logistics is in fact highly and consistently profitable. The Centre for International Corporate Tax Accountability and Research analysis demonstrates that Dubai Ports' Australian operation consistently delivers a profit margin of 25% over the eight-year period in which the company has paid no Australian tax.
"In what world is it fair that a wharfie on $81,335 per annum pays around $18,500 in tax, while their employer -- who earns hundreds of millions of dollars each year in Australia -- pays not a single red cent in tax to the Australian community?", asked Mr Evans.
"DP World Australia (Holding) Pty Ltd has had annual total revenue of over AUD$550 million in every year but one ($543m in 2014/15) and consistently ranked in the top 500 or 600 largest corporations in Australia. Its 2022 revenue was nearly AUD$830 million. If DP World has artificially reduced profits in Australia to avoid corporate income tax payments, a conservative estimate suggests DP World may have short changed Australia - and funding for health, education and other public services - by more than $330 million over the 8-year period," said CICTAR's Principal Analyst, Jason Ward.
Dubai Ports' Australian wages bill, which is of course fully tax deductible, was only $300.1 million in 2022, representing just 36% of their revenue from services. The rest of Dubai Ports' reported "losses" in Australia were mostly in the form of related-party debt payments and management fees which are funnelled offshore to other Dubai Ports owned and controlled entities incorporated overseas in offshore tax havens for the principal purpose of recording a loss in Australia and avoiding a local tax bill.
"This is a company that is taking the money of Australian businesses and consumers, who rely on containerised freight for the vast bulk of our imports and exports, and sending it directly overseas without paying taxes to fund the vital public infrastructure that our society depends on like schools, hospitals, roads and infrastructure. With Australian workers and families struggling with a cost-of-living crisis, Dubai Ports and other multinationals need to start paying their way in this country," Mr Evans said.
