Exemplary governance is one of the core foundations of our business strategy. This regulates everything we do, including how objectives are set and achieved, how risk is monitored and assessed and how performance is optimised.
As a not-for-profit fund built from the ground up to suit the unique needs of Qantas Group staff, we exist entirely for the benefit of members and our members guide everything we do.
These values are underpinned by our commitment to exemplary governance and transparency. This regulates how objectives are set and achieved, how risk is monitored and assessed, and how performance is optimised. As part of our commitment, we are proud to be a signatory to the Voluntary Tax Transparency Code.
The Voluntary Tax Transparency Code (VTTC) is a set of principles and ‘minimum standards’ developed by the Board of Taxation and administered by the Australian Taxation Office (ATO) to guide the public disclosures of tax information. The VTTC is designed to encourage greater transparency and improve the public’s understanding of how institutions and businesses comply with Australia’s taxation laws.
This Tax Transparency Report for Qantas Superannuation Plan (ABN 41 272 198 829) has been prepared as a signatory to the VTTC and covers the 2020/21 financial year.
Qantas Super is a significant taxpayer, paying around $51.2 million in income tax in the 2020/21 financial year.
The following table shows the types of taxes paid by Qantas Super:
|Type of tax paid - FY2020/21|
|Income tax - Fund|
|Employment Taxes – FBT & Payroll Tax|
|Taxes relating to employee salaries|
|Net GST paid/not recovered|
|Taxes relating to member benefit payments|
Not all amounts recognised as income in a fund’s financial statements will be treated as income for tax purposes, nor will all expenses be deductible for tax purposes.
To calculate our taxable income, or the amount on which Qantas Super must pay tax, we take our ‘accounting income’ and adjust for a variety of items that tax law treats differently. Because of the tax rules that apply to super funds, our income tax expense will usually be lower than the tax rate applied to accounting income.
The following table shows prima facie tax expense, or the tax rate for super funds (15%) applied to accounting income. Adjustments are then made to this number to determine our income tax expense.
|Reconciliation of accounting income to income tax expense - FY2020/21|
|Accounting income before income tax|
|Prima facie income tax expense (at 15% applied to the accounting net result)|
|Adjusted for the tax impact of the following items|
|Non-taxable member contributions and rollovers in|
|Life insurance premiums|
|Tax-exempt pension income|
|Franking credits and FITOs|
|CGT discount concession and other amounts not included in assessable income|
|Under/(over) provision relating to prior years|
|Income tax expense|
|Effective rate of income tax (prima facie tax expense adjusted for by non-assessable/non-deductible amounts)|
*Effective tax rate is lower than 15% predominantly due to the impact of the CGT discount concession on capital gains, refundable franking credits and non-taxable member contributions.
Income tax expense is not the amount of tax paid to the ATO in that year, as actual income tax paid will differ from income tax expense on accounting income. This is because the timing of when income and expenses are recognised is different for accounting and tax purposes as a result of the requirements of accounting standards and income tax law.
|Reconciliation of income tax expense to tax paid – FY2020/21|
|Income tax expense|
|Under/(over) provision for tax current year|
|Net unrealised investment losses|
|Accrued income and expenses|
|Over/(under) provision relating to prior years|
|Income tax paid|
Qantas Super invests internationally in order to help diversify investment risk and maximise returns to our members. Our international investments are in listed and unlisted markets, and across all asset classes. As a result, Qantas Super pays taxes in foreign jurisdictions. The amount of foreign tax paid in the FY2020/21 year was $5.3 million.
Qantas Super pays these foreign taxes in the countries where the investments are located. A tax offset is claimed in Australia for eligible foreign taxes paid.
From time to time, we will also invest in vehicles domiciled in low or no-tax jurisdictions, with many well-regarded international investment managers choosing to base their funds in such locations for a variety of commercial and legal reasons. The low or no-tax country provides a tax-neutral platform where an investment manager can aggregate investor funds from all over the world, and avoids a possible third layer of tax on investment income.