2023
Tax
Contribution
Report
Coles Group Limited
ABN 11 004 089 936
Acknowledgement of Country Basis of preparation
Coles wishes to acknowledge the Traditional Custodians of This report discloses details of the total taxes paid and collected
Country throughout Australia. on behalf of Australian Government authorities by Coles, in
accordance with taxation laws, regulations and guidance.
We recognise their strength and resilience and pay our respects
to their Elders past and present. References in this report to ‘Coles’, ‘we’ and ‘our’, are
references to Coles Group Limited and its wholly owned
Coles extends that respect to all Aboriginal and Torres Strait
subsidiaries.
Islander people, and recognises their rich cultures and their
continuing connection to land and waters. All payments to governments are stated in Australian dollars.
Aboriginal and Torres Strait Islander people are advised that This report has been prepared in accordance with the
this report may contain names and images of people who requirements of the Board of Taxation’s Tax Transparency
are deceased. Code. Specifically, it provides the necessary disclosures and
information to address the minimum requirements of Part A
All references to Indigenous and First Nations people in this
and Part B for large businesses, as set out in the Code.
report are intended to include Aboriginal and/or Torres Strait
Islander people. The tax reconciliations and effective tax rate disclosures in
this report have been prepared having regard to the draft
guidance developed by the Australian Accounting Standards
Board (‘AASB’) to assist companies in meeting the Tax
Transparency Code recommendations.
This report has been prepared based on data recorded in our
financial systems, being the same data and financial systems
used to prepare our financial statements for the same period.
All data, unless otherwise stated, is prepared for the 52-week
period 27 June 2022 to 25 June 2023 (‘2023’ or ‘FY23’), and the
comparative period 28 June 2021 to 26 June 2022 (‘2022’ or
‘FY22’). Total tax contributions are calculated in accordance
with the measurement and recognition principles of Australian
Cover image Accounting Standards adjusted for when cash is paid,
Coles State General Manager Queensland Jo Brown, Executive General Manager or received, by Coles.
Supermarket Operations Claire Lauber, and e-Commerce graduate Shaz.
Contents Our 2023 reporting suite
Basis of preparation Inside front cover
Message from the Chief Financial Officer 2
Tax policy, strategy and governance 3
Our corporate reporting suite contains detailed information on Coles’ strategy, risk
Our tax contributions to Australia 4 management and governance frameworks. The suite also includes our financial and
Reconciliation of accounting profit non-financial performance and progress against our sustainability and human rights
to income tax expense 5 commitments. We continually evolve our reporting suite in response to shareholder
and stakeholder feedback, and to align with legislation, disclosure frameworks and
Reconciliation of income tax expense
leading practices.
to current period income tax payable 5
Effective company tax rate 6
International related party transactions 6
Independent Auditor’s Review Report to the
Directors of Coles Group Limited 7
To view these reports visit www.colesgroup.com.au
Coles Group 2023 Tax Contribution Report 1
Welcome to our
2023 Tax Contribution Report
Message from the Chief Financial Officer
On behalf of the Board, I am pleased to This report provides an overview of Coles’ tax
present our 2023 Tax Contribution Report. profile and our approach to tax governance
and risk management. The information
Our contribution to the Australian economy
contained in this report has been prepared on
and commitment to corporate transparency is
a voluntary basis in accordance with the
driven by our vision to be the most trusted
Board of Taxation’s Tax Transparency Code.
retailer in Australia.
The report should be read in conjunction with
As one of the largest corporate employers in
our 2023 Annual Report, which is available on
Australia, and a top 100 taxpayer, we are
our website at www.colesgroup.com.au.
pleased to report our $2.1 billion of tax
contributions to Australian federal and state
governments in the 2023 financial period.
We approach the management of Coles’ tax
obligations with integrity and diligence.
Committed to our vision to be Australia’s most SR (Charlie) Elias
trusted retailer, we are dedicated to ensuring Chief Financial Officer
Coles maintains robust tax governance Coles Group Limited
practices and collaborative relationships with
14 September 2023
all tax authorities.
Coles Group 2023 Tax Contribution Report 2
Tax policy, strategy
and governance
Coles is committed to the highest standards of corporate governance. We understand
that a robust and transparent corporate governance framework is central to the success
of our business and management of our taxation risks.
Our approach Our risk management Our transparency and engagement
• A commitment to good corporate citizenship and acting • The Board oversees tax risk, evaluates our tax risk • Engage with and maintain an open, proactive and
with integrity and transparency in tax matters management framework and delegates relevant powers to cooperative relationship with all revenue authorities
• Diligence and care in relation to tax matters ensuring the Audit and Risk Committee • Part of the Australian Taxation Office (‘ATO’) ‘Top 100 justified
compliance with applicable laws and regulations • Rigorous processes in place for risk assessment, reporting trust program’ for income tax and goods and services tax
• A low appetite for tax risk, adopting conservative positions and escalation of tax risks to senior management, the Audit • ATO annual pre-lodgment compliance review of Coles’
and Risk Committee and the Board consolidated group income tax return, covering material
• The Coles Tax Governance Framework, approved by the transactions and treatments adopted
Audit and Risk Committee, sets out accountabilities,
procedures, internal audit requirements and
documentation
Our tax contributions
to Australia
Coles’ economic contribution to the Australian economy in 2023
was $2.1 billion of taxes paid to, and collected on behalf of,
Australian Government authorities.
Taxes paid to, and collected on behalf of, Australian Government authorities have been prepared
in accordance with the Basis of preparation section of this report.
Australian taxes paid by Coles Australian taxes collected and paid by Coles
Coles is subject to federal and state government taxes, including income tax and other taxes Coles also collects and pays taxes including Pay-as-you-go (‘PAYG’) withholding tax, wine
such as excise, payroll tax, customs duty, property taxes and fringe benefits tax. equalisation tax, and net goods and services tax (‘GST’).
2023 2022 2023 2022
AUSTRALIAN TAX $m $m 0.5% AUSTRALIAN TAX $m $m
0.6% -8.0%
Income tax1 370 485 1.0% PAYG withholding from
Excise2 404 425 Income tax employee salary and
14.8% PAYG withholding
27.4% Excise wages1 953 906 from employee
Payroll tax3 301 268
salary and wages
Customs duty 11 10 $1.1bn
33.7% Payroll tax Wine equalisation tax 151 158
$1.0bn Wine equalisation tax
Customs duty Net goods and
Property tax 7 9 Net goods and services tax
Property tax services tax2 (82) 0
93.2%
Fringe benefits tax 5 5 36.8%
Fringe benefits tax TOTAL3 1,022 1,064
TOTAL4 1,098 1,202
1 Increase due to salary and wages increases.
1 Decrease due to income tax return refunds for previous years. 2 Refund of GST due to increased operating and capital costs.
2 Decrease due to lower consumption of spirit products. 3 In addition, valued added tax and surtaxes of $0.1m was paid in China.
3 Increase due to increased tax rates and salary and wages increases.
4 In addition, income tax paid of $0.01m was paid in China.
The total taxes paid to, and collected on behalf of, Australian Government authorities in FY23 was
$2.1 billion.
Coles Group 2023 Tax Contribution Report 4
Reconciliation of accounting Reconciliation of income tax expense
profit to income tax expense to current period income tax payable
A reconciliation of Coles’ accounting profit to income tax expense is published in the Financial Income tax payable represents the income tax paid or estimated payable to the ATO.
Report (part of Coles’ 2023 Annual Report) for the 52-week period ended 25 June 2023 at Note
A reconciliation of Coles’ income tax expense to current period income tax payable is set out
1.6. This disclosure has been prepared for the financial statements of Coles Group Limited and its
below.
controlled entities, in accordance with relevant standards issued by the AASB.
CONSOLIDATED
A reconciliation of Coles’ accounting profit to income tax expense is set out below.
2023 2022
$m $m
CONSOLIDATED Income tax expense reported in the Income Statement 451 425
2023 2022 Adjustment in respect of current income tax of previous years 34 8
$m $m
Deferred income tax relating to origination and reversal of
Profit before income tax from continuing operations 1,465 1,467 temporary differences (17) (39)
Profit before income tax from discontinued operations 84 6 Adjustment in respect of deferred income tax of previous years (25) (3)
Profit before income tax 1,549 1,473 Current year income tax payable 443 391
At Australia’s corporate tax rate of 30.0% (2022: 30.0%) 465 442
Non-temporary differences Calculation of the current year income tax payable includes both temporary and non-temporary
differences.
Adjustments in respect of income tax of previous years (9) (5)
Share of results of joint venture 4 2 Temporary differences exist where amounts are assessable or deductible under income tax law at
a different time to when they are recognised under Australian Accounting Standards. For
Non-deductible expenses for income tax purposes 6 2
example, different depreciation rates may be used for tax and accounting purposes. The
Non-assessable income for income tax purposes (13) (11)
differences will reverse over time until an asset is fully depreciated.
Recognition of capital losses (8) (5)
Temporary differences in FY23 predominantly relate to movements in provisions, trade and other
Taxable gain on sale of Express business 6 -
payables, fixed assets, intangible assets, lease liabilities and right of use assets leading to the
Income tax expense reported in the Income Statement1 451 425 difference between income tax expense and income tax payable.
Income tax expense is attributable to:
Non-temporary differences are amounts that are recognised for either accounting purposes or
Profit from continuing operations 423 422
tax purposes, but not both.
Profit from discontinued operations 28 3
Non-temporary differences in FY23 primarily relate to the Research & Development incentive
451 425
claims, income tax gain on the sale of Express assets, reversal of property impairments, properties
1 At the effective income tax rate of 29.1% (2022: 28.9%) held for sale, recognition of capital losses and Coles’ 50% share of the loss recorded by flybuys,
which is equity accounted.
Coles Group 2023 Tax Contribution Report 5
Effective company tax rate International related
party transactions
The effective tax rate is calculated as income tax expense divided by accounting profit before tax. Coles’ Tax Governance Framework is designed to ensure all taxation laws and regulations
applicable to our business are adhered to, including those in relation to international related
The effective tax rate will differ from the company tax rate of 30%, due to non-temporary
party dealings.
differences and tax rate differentials in foreign jurisdictions.
Coles applies arm’s length principles with respect to its international related party dealings that
The effective company tax rate is set out below.
are consistent with Australia’s transfer pricing laws and ATO guidance on accepted pricing
methodologies. Arm’s length pricing analysis also takes into account the regulatory requirements
of the counterparty jurisdiction and the Organisation for Economic Co-operation and
CONSOLIDATED Development guidelines.
Effective tax rate1 2023 2022
While Coles’ operations are predominantly in Australia, Coles has a captive insurance company
Effective tax rate for continued operations 28.9% 28.8% in Singapore to provide access to the reinsurance market. Coles also has a presence in China
Effective tax rate for discontinued operations 33.3% 50.0% (with a holding company in Hong Kong) to support the export and sale of meat and other
Total effective tax rate 2
29.1% 28.9% consumer goods.
Notes Details of Coles’ international related party dealings are set out below:
1 The effective tax rate for Australian operations is the same as the effective tax rate for global operations.
2 The effective tax rate in FY23 was less than 30% due to the non-temporary differences set out on page 5.
2023 2022
JURISDICTION NATURE OF ACTIVITIES $m $m
China Fee for services provided by Coles China
to Coles Australia 3 3
Hong Kong Holding Company - -
Singapore1 Premium for insurance cover and reinsurance
placement provided by Coles Singapore to
Coles Australia 2 11
1 Decrease due to no insurance on property damage provided by Coles Singapore to Coles Australia in FY23.
Coles Group 2023 Tax Contribution Report 6
Ernst & Young Tel: +61 3 9288 8000
8 Exhibition Street Fax: +61 3 8650 7777
Melbourne VIC 3000 Australia ey.com/au
GPO Box 67 Melbourne VIC 3001
Independent Auditor’s Review Report to the Directors of Coles Group Limited
We have reviewed the Total Taxes Paid and Collected on behalf of Australian Government authorities of $2,120 million (‘Total Tax Contributions’) as set out in
the ‘Our tax contributions to Australia’ section of the attached Tax Contribution Report of Coles Group Limited for the year ended 25 June 2023 (the ‘Tax
Report’).
Management's responsibility for the Tax Report
The Company's management is responsible for the preparation of the Tax Report and for establishing a framework in which the Total Tax Contributions and
other related information in the Tax Report has been prepared. Management has determined that this framework as set out in the Basis of preparation section
of the Tax Report is appropriate to the needs of the users of the Tax Report. Management is also responsible for such internal controls as management
determines are necessary to enable the preparation of the Tax Report that is free from material misstatement, whether due to fraud or error.
Auditor's responsibility
Our responsibility is to express a conclusion on the Total Tax Contributions in the Tax Report based on our review. We have conducted our review in
accordance with Standard on Review Engagements ASRE 2405 Review of Historical Financial Information Other than a Financial Report in order to state
whether, on the basis of the procedures described, anything has come to our attention that causes us to believe that the Total Tax Contributions is not
prepared, in all material respects, in accordance with the measurement and recognition principles of Australian Accounting Standards adjusted for when cash
is released, or received, by Coles Group Limited. ASRE 2405 requires us to comply with the requirements of the applicable code of professional conduct of a
professional accounting body.
A review consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not
enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Coles Group 2023 Tax Contribution Report 7
Conclusion
Based on our review, which is not an audit, nothing has come to our attention that causes us to believe that the Total Tax Contributions of $2,120 million in
the Tax Report is not prepared, in all material respects, in accordance with the measurement and recognition principles of Australian Accounting Standards
adjusted for when cash is paid, or received, by Coles Group Limited.
Emphasis of matter - basis of accounting and restriction on reliance
Without modifying our conclusion, we draw attention to the Basis of preparation section of the Tax Report which describes the basis of accounting. This basis
of accounting is of such importance that it is fundamental to your understanding of the Total Tax Contributions.
This review report has been prepared for the Directors of Coles Group Limited in accordance with our engagement letter with Coles Group Limited. We
disclaim all responsibility to any other party for any loss or liability that the other party may suffer or incur arising from or relating to or in any way connected
with the contents of our report or the reliance upon our report by the other party.
Ernst & Young
Melbourne
14 September 2023
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Coles Group 2023 Tax Contribution Report 8
Coles Group Limited
ABN 11 004 089 936
800–838 Toorak Road
Hawthorn East
VIC 3123 Australia
