Apple New Zealand is paying taxes in Australia: Report

According to a report, Apple NZ has paid no tax in New Zealand regardless of recording $4.2 billion in sales since 2007 -- but has instead paid $37 million in income tax to the ATO.
Written by Corinne Reichert on

Apple NZ has paid no taxes within New Zealand, and has instead been paying the amount due to the Australian Taxation Office (ATO), it has been reported.

According to the New Zealand Herald, Apple NZ has paid nothing in taxes to the New Zealand Inland Revenue Department for the last 10 years despite making sales worth around $4.2 billion since 2007.

The report cited Apple Sales New Zealand's financial statements as showing that it paid $37 million in income tax -- but that this was paid to the equivalent tax office in Australia rather than New Zealand.

Apple has increasingly come under scrutiny for its tax-avoidance practices, having been audited by the ATO and accordingly upping the amount of tax it paid in Australia during 2014-15.

According to the ATO's 2014-15 Corporate Tax Transparency report, Apple paid AU$146 million in tax, more than double the AU$72 million it paid a year earlier.

Under Australia's new multinational tax anti-avoidance laws -- implemented as part of the Organisation for Economic Cooperation and Development (OECD) recommendations stemming from its G20-commissioned base erosion and profit-shifting (BEPS) project -- as of July 2016, companies operating in Australia that have an annual global income of more than AU$1 billion are required to lodge their general purpose financial statements to the ATO if they are not already doing so with the Australian Securities and Investments Commission (ASIC).

As a result of this, Apple in January revealed that it paid 97 percent of its AU$132 million 2016 Australian profit in taxes to the ATO, paying AU$128 million in taxes and leaving it with just AU$3.7 million in net profit.

Apple Australia made AU$7.5 billion in revenue during FY16, and globally made $216 billion in sales.

In September, Japanese authorities similarly cracked down on Apple's taxation practices after discovering that it was sending a portion of its iTunes profit to a business unit in Ireland without paying taxes on the international transaction during 2014 and 2015.

The Tokyo Regional Taxation Bureau consequently forced Apple to pay 12 billion yen ($118 million) in back taxes.

Apple has been using Ireland's lax taxation laws to avoid paying up for some time, with the European Commission ruling in August after a two-year investigation that Ireland should claim €13 billion in "illegal tax benefits" back from Apple.

The European Commission had found that Apple used two shell companies incorporated in Ireland to report all of its European profits to be taxed at a rate of less than 1 percent -- and at one point at a taxation rate of only 0.005 percent -- which constituted a breach of state aid rules, making the practice illegal.

In December, however, Ireland announced that it would be appealing the European Commission's ruling to collect the €13 billion in taxes, saying the commission is infringing on Ireland's sovereignty.

Ireland's taxation policies are designed to attract foreign investors, the Irish Department of Finance said.

"The purpose of the state aid rules is to tackle state interventions which confer a selective advantage. The state aid rules by their nature cannot remedy mismatches between tax systems on a global level," the Irish government said in its legal arguments.

"Ireland did not give favourable tax treatment to Apple. The full amount of tax was paid in this case and no state aid was provided. Ireland does not do deals with taxpayers."


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