Appendix 1 - Statistics

Profile of QCs, LAQCs and LTCs

Table 8 shows that there were a large number of LAQCs and QCs before the 2010 Budget. The vast majority (95 percent) were LAQCs, suggesting that access to losses at the personal level was a major attraction in the formation of QCs. Most LAQCs with activity (about 80 percent) attributed losses.

However, around 20 percent of LAQCs were tax-paying. These could have been companies in cyclical industries, or they could have represented companies that had start-up losses after they were established, but had now matured and become profitable; or profitable firms that might eventually have losses to attribute.

Table 8: Number of QCs and LAQCs in 2009 tax year
QCs	Number
Profit making	4,257
Loss making	1,902
Nil returns	1,457
Total	7,616
LAQCs
Profit making	24,377
Loss making	84,624
Nil returns	27,041
Total	136,042
Total (QCs + LAQCs)	143,658
LAQC as % of total	94.7%

Since the 2010 reforms, the composition has changed significantly. Companies that were LAQCs have become either QCs or LTCs. However, Table 9 indicates that there are fewer entities overall in these categories, suggesting that some have chosen to wind up or carry out business under another form.

Many of these new LTCs are involved in real property. This tallies with earlier data on the distribution of QC/LAQC losses by industry, as shown in Table 10.

Table 9: Total numbers of LAQCs, QCs and LTCs since 2010 reforms
	Tax year
	2011	2012	2013
LAQCs	133,617	1,310	0
QCs	6,282	80,346	68,844
LTCs	0	43,826	46,182

Before Budget 2010, half the companies passing through losses were in the property industry. But loss pass-throughs were widely distributed across the other industries. For most industries, around half the firms were passing through losses.

Table 10: Distribution of loss pass-throughs by industry for 2011
	Percent of total losses passed through	Number pass through	Percent of firms in industry passing losses through	Average loss
	%	Number	%	$
Agriculture	16	5,289	49	$61,000
Mining	0	43	43	$70,000
Manufacturing	3	1,668	46	$38,000
Utility & waste	0	62	45	$16,000
Construction	3	2,277	36	$29,000
Wholesale trade	2	1,136	47	$28,000
Retail trade	5	3,384	50	$30,000
Food/accommodation	5	2,497	65	$39,000
Transport	2	1,045	48	$33,000
Information/telecom	0	470	58	$19,000
Finance/insurance	3	1,948	62	$27,000
Property	47	41,862	83	$22,000
Professional service	3	3,237	42	$19,000
Admin service	1	506	52	$22,000
Public admin	0	27	38	$0
Education	0	281	50	$21,000
Healthcare/social	1	568	34	$46,000
Arts & recreation	1	598	62	$32,000
Other services	1	1,060	49	$20,000
Not elsewhere included	1	1,263	75	$21,000
Unknown industry	4	3,880	70	$21,000
Total	100	73,101	65	$27,000

Distributions of LTC and QC income and losses

Charts 2 and 3 show the distribution of reported income and losses for LTCs and QCs in 2013. 80 percent of LTCs fell into the loss/income range -$30,000 to +$10,000 while 80 percent of QCs fell within the -$20,000 to +$20,000 range. Given that LTCs allow loss flow-through, it is not surprising that a higher proportion of LTCs were reporting losses, although the difference is not great.

Chart 2: Distribution of combined LTC and QC income – 2013 tax year

Chart 2: Distribution of combined LTC and QC income – 2013 tax year
Larger version of image

Chart 3: Distribution of LTC and QC income – 2013 tax year

Chart 3: Distribution of LTC and QC income – 2013 tax year
Larger version of image

Deduction limitation rule

In terms of non-allowable deductions, the number of LTCs reporting non-allowable deductions carried forward as at the end of the 2013 tax year was 446 (around one percent of total LTCs). The number of look-through owners affected was 695. The average value of non-allowable deductions carried forward per owner was $16,547.

Overseas income

Table 11: LTCs with overseas income, foreign tax credits and losses
	Number of LTCs with foreign income	Total foreign income	Total FTCs	Number of LTCs with foreign losses	Total foreign losses
2012	184	$217.1m	$7.2m	14	-$0.2m
2013	239	$29.8m	$6.7m	21	-$1.4m
2014*	273	$36.2m	$6.0m	24	-$3.9m

*almost a complete year

Table 12: Distribution of overseas income and losses
Overseas income			Overseas losses
$000s	Number of LTCs		$000s	Number of LTCs
$000s	2012	2013	$000s	2012	2013
0 to 10	141	162	0 to -10	10	7
10 to 20	8	16	-10 to -20		7
20 to 30	6	6	-20 to -30	1
30 to 40	4	8	-30 to -40		1
40 to 50	1	6	-40 to -50	1
50 to 60	3	3	-50 to -60		1
60 to 70	3	1	-60 to -70		1
70 to 80		2	-70 to -80	2	1
80 to 90	1	3	-80 to -90
90 to 100	1	2	-90 to -100		3
100+	16	30	-100+
Total	184	239	Total	14	21

Distribution of LTC owners

Table 13: Number of owners reported in 2013 LTC returns
Number of owners	Number of LTCs
1	14,002
2	28,556
3	2,149
4	992
5	197
6	89
7	20
8	13
9	5
10	1
11	1