Apple Australia says all Australian revenue booked locally

The local arm of Cupertino has said it does not need to make any changes to its business under new tax avoidance laws.

Apple Australia has told the Senate Economics committee looking into Corporate Tax Avoidance that its taxes are up to date, and that it had no penalties imposed following an audit by the Australian Taxation Office (ATO) covering the 2012-16 fiscal years.

"Apple continues to have a straightforward business model here in Australia that has essentially remained unchanged for decades," Apple Australia managing director Tony King told the committee on Tuesday morning.

"We buy, distribute, and sell Apple's products to resellers and customers -- the revenue from which is all recorded locally in our accounts."

King said that the company had not needed to make any changes to its business model following the introduction of multinational tax avoidance and profit shifting laws in Australia.

For the 2015-16 financial year, King said Apple had booked around AU$7.5 billion in revenue, AU$400 million in net profit, and an income tax payment of AU$120 million. Under questioning later in the hearing, King said AU$58 million of the 2016 tax payment was an adjustment for the previous five years in tax.

In the most recent figures release by the ATO in its Corporate Tax Transparency report for 2014-15, Apple collected AU$8.3 billion in revenue and paid AU$146 million in tax, a AU$72 million increase from the tax paid in 2013-14.

"The total tax for the five year period [between 2012 and 2016] was some AU$600 million," King said. "The equivalent five-year period leading to 2011, when we were under the old APA [advanced pricing agreement], was about AU$175 million.

"So our taxes have increased dramatically across a 10-year period."

According to King, over the 10-year period, Apple Australia's revenue has increased by a factor of 2.6, while its tax obligations have increased by a factor of 3.6 -- which is partially explained by the company changing its business mix locally to include retail stores and opening the App Store.

Prior to the audit being completed by the ATO in May, Apple had an advanced pricing agreement with the ATO that determined how the company complies with the nation's transfer pricing laws. King said the company still hopes to sign a new APA.

The managing director said the transfer pricing the company uses is correct, and the company is not impacted by Australia's new tax avoidance laws.

"The diverted profits tax [DPT] does not impact Apple's operations in Australia," he said.

"We do not expect MAAL [Multinational Anti-Avoidance Law] or DPT to impact Apple Australia's tax position."

Earlier this month, Apple announced $45.4 billion of global revenue and around $8.6 billion in profit, with an effective tax rate of 25.5 percent for the quarter.

While Apple claims compliance with Australia's taxation laws, fellow US-based multinational tech behemoth Google has previously said it would fight its ATO tax bill.

Google has also previously been audited by the ATO, and will face the committee later on Tuesday.

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