Aldi defends its tax record

German supermarket retailer Aldi's submission to an inquiry into corporate tax avoidance reveals soaring profits in recent years.

Aldi supermarket shopping trollies at a in Brisbane

Discount supermarket group Aldi has more than doubled its Australian profits within three years. (AAP)

Discount supermarket chain Aldi has defended its tax record amid a more than doubling in profit over four years.

The German retailer's submission to a Senate inquiry into corporate tax avoidance shows pre-tax profit in its Australian operations soared from $121 million in 2010 to $261 million in 2013.

Income tax also more than doubled in that period, from $37 million in 2010 to $82 million in 2013.

In that four years, Aldi paid a total of $238 million in income tax, it said.

"This represents an average effective tax rate of 32 per cent (each year), which is above the company tax rate of 30 per cent," the retailer's submission said.

Aldi's submission to the inquiry follows criticism from Richard Goyder, the chief executive of Wesfarmers, which owns supermarket giant Coles.

Mr Goyder in June called for a level playing field in the supermarket industry, singling out Aldi in his call for greater scrutiny of overseas operators' tax records.

Aldi's profits still pale in comparison to its main rivals, with Woolworths achieving earnings of $3.3 billion in its food and liquor businesses in the 2013/14 financial year, while Coles had food and liquor earnings of $1.54 billion in the same year.

Since arriving in Australia in 2001, Aldi has grown its network of stores to 373 in Queensland, ACT, NSW and Victoria, with plans to open another 120 in South Australia and West Australia.

Aldi's 2014 income tax return is yet to be finalised.

The retailer also said it has not used its position as a multinational business to reduce its tax liability in Australia.

"Aldi wishes to make it explicitly clear that it does not engage in the inappropriate pricing of international related party transactions for the purpose of artificially reducing taxable profits in Australia," the company said.


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