EXCLUSIVE: Hisense Pay Less Than 1% Tax Despite 50% Jump In Revenue
Chinese TV and appliance manufacturer Hisense who has been accused of buying TV market share with heavy discounting, has lifted revenues from $100M in 2014, to $150M in to 2015 to over $180M in 2016.
Despite the increase in revenues the Company only paid $1.4M in tax in 2015, with questions now being asked as to how the Company manages to pay less than 1% tax in Australia, they are also among the top three whitegood brands in Australia.
Their latest financial reveal lodged in December 2016, reveal that the Company only spent $2.7M on advertising and marketing despite being a major sponsor of the Australian Tennis Open, Hisense, Arena and a global sponsor of the Red Bull Formula One team and in 2018 they will be a sponsor of the Football World Cup.
Of the $2.7M marketing spend, $1.9M was spent on advertising and $1.26M on business promotions.
Recycling cost the Company $846,000. Their After sales service cost the Company $6.5M, what’s not known is whether returns or the cost of faulty goods are included in this cost item. The cost of Corporate Boxes at the Tennis and Formula One events cost the Company $58,542 in 2015.
He also did not comment on claims that the Company whose products are heavily discounted at retailers is buying market share resulting in the lack of profits at the Chinese Company.
Late last year Hisense who will shortly launch a new range of TV’s claimed the #1 TV slot in Australia with their low-cost Hisense 4K Ultra High Definition TV range which retailers were heavily discounting.
In 2014, the Chinese Company reported a profit of $1.7M on revenues of $100,259,000. In 2015, this profit slipped to $1,449,212 despite the Company increasing revenues to $150,689,059.
The Australian Tax Office have not said whether Hisense is one of the foreign Companies that they are currently investigating.
In a statement, the ATO said it did “vigorously examine” the tax affairs of multinationals. “The ATO will pursue matters through the courts if necessary to uphold the integrity of Australia’s tax system.”
The ATO’s admission that it was chasing overseas multinationals comes as the Federal Government cracks down on companies avoiding their tax obligations in Australia. There is no evidence that Hisense is one of those Companies.
What is now referred to as the “Google tax” was passed into law earlier this year, it gave the ATO new powers to enforce tax laws on major companies.