How DP World Operated in Australia for 8 Years Without Paying a Cent in Corporate Tax

In October 2023, the Centre for International Corporate Tax Accountability and Research (CICTAR) published a report titled "Does DP World dodge taxes in Australia?". The report accuses DP World, a subsidiary of Dubai World, of failing to pay any corporate income tax in Australia over an eight-year period (2013/14 to 2020/21 fiscal years).

Dubai World is wholly owned by the Dubai government and operates as a global port and logistics company. Its Australian subsidiary, DP World Australia (Holding) Pty Limited (hereafter referred to as the "Australian subsidiary"), manages port operations in cities like Sydney, Melbourne, and Brisbane. Although Dubai World holds less than 50% of the Australian subsidiary (the report states only 33.14%), it exercises effective control through its corporate structure. Since the report’s explanation of this structure is convoluted and unrelated to how the Australian subsidiary avoids tax, we will not delve into the details here.

According to CICTAR, the Australian subsidiary holds total assets worth AUD 2.4 billion and has generated AUD 4.5 billion in revenue over eight years. The company is also highly profitable, with EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) exceeding AUD 300 million in 2022 and an eight-year EBITDA margin of 25%. Despite its size and profitability, CICTAR’s analysis of the Australian Taxation Office (ATO) data and the Australian subsidiary’s financial statements reveals that it has not paid a single cent in corporate income tax during this period, allegedly avoiding AUD 300 million in taxes.

It is worth noting that CICTAR stops short of outright accusing Dubai World of tax evasion but strongly implies it.