Apple Australia revenue jumps 30 percent, claims it is 29 percent less profitable

Apple Australia has reported it paid AU$85 million in income tax during the 2015 financial year, despite earning AU$7.9 billion in revenue.
Written by Aimee Chanthadavong, Contributor

Apple Australia said it continues to remain compliant with Australian tax laws, despite only paying a small fraction of income tax on profit from the $7.9 billion in revenue it earned during the 2015 financial year for the period ending September 26, 2015.

Apple Australia paid only AU$85 million in income tax during the year, up from the $80 million it paid during FY14, while the group's revenue rose 29.5 percent to AU$7.9 billion from AU$6.1 billion reported last financial year.

The company also reported total comprehensive income for the year was AU$122 million, down AU$50 million on last year's AU$172 million.

Apple said in its financial report it lodged with the Australian Securities and Investments Commission (ASIC) that the amount of tax paid was in line with existing taxation laws.

"Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities," it said.

"The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the date of the statement of financial position."

Last April, executives from Apple, along with Google and Microsoft, confirmed they were being investigated by the Australian Taxation Office (ATO) as part of the Senate's tax avoidance inquiry. The inquiry found AU$31 billion was funnelled to Singapore within a year by 10 multinational companies.

At the time, Apple's Australian managing director Tony King said that Apple Australia is entirely owned by Apple Ireland, but insisted that the company does pay tax in Australia, claiming to not know of the so-called "double Irish Dutch sandwich" process of shifting profits to low-tax countries -- a practice in which Apple has previously been accused of engaging.

The federal government introduced new multinational tax avoidance laws that came into effect at the start of the year to combat the practice. Under the new laws, multinational companies with annual revenue above AU$1 billion must report to the ATO their income, tax, and transfer pricing arrangements, otherwise they could face being penalised at a higher rate for tax evasion.

On Monday, Google agreed to pay the UK government £130 million back in tax, following an inquiry into the company's existing tax arrangements. Google also agreed to a new tax arrangement with Her Majesty's Revenue and Customs.

"We have agreed with HMRC a new approach for our UK taxes and will pay STG130 million, covering taxes since 2005," a Google spokesperson said.

"We will now pay tax based on revenue from UK-based advertisers, which reflects the size and scope of our UK business.

"The way multinational companies are taxed has been debated for many years and the international tax system is changing as a result. This settlement reflects that shift and is in line with recent OECD guidance."

In global terms, Apple reported quarterly profit of $18.4 billion, and $75.9 billion in revenue. But this fell short of Wall Street's expectation of revenue of $76.6 billion.

The company revealed during the quarter that sales for iPads and Macs were down from 21.4 million to 16.1 million in the year-ago quarter, and 5.5 million to 5.3 million in the year-ago quarter, respectively.

Meanwhile, iPhone sales were only up by a margin to 74.7 million, from 74.5 million in the year-ago quarter. This was in contrast to a report by Strategy Analytics that indicated Apple controlled 89 percent of all smartphone profits worldwide during Q4 2014, following the launch of the iPhone 6 and iPhone 6 Plus.

Despite this, Apple chief executive Tim Cook said in a statement that the company delivered its "biggest quarter ever" due "all-time record sales of iPhone, Apple Watch, and Apple TV" during Q1 2015.

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