Apple paid taxes from New Zealand revenues to Australia for the last 10 years - report

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Apple has not paid any income tax in New Zealand for the last ten years, a new report reveals , with the iPhone producer said to have paid out only $37 million from sales generated in the country, paying the due tax to the Australian Tax Office instead of New Zealand's Inland Revenue.




Sales of Apple products in New Zealand since 2007 total $4.2 billion, according to the New Zealand Herald's analysis of the local subsidiary's financial statements. The same financial reports show $37 million had been paid out in income tax over the period, but not to New Zealand's tax authority.

It is noted the accounts calculated the income tax using the statutory rate of 30 percent, not the 28 percent tax rate charged in New Zealand. The higher rate is in fact set by the Australian Tax Office, with the $37 million paid to it instead of New Zealand's Inland Revenue.

The arrangement is legal, as a treaty between Australia and New Zealand over dual income tax claims default payments to the country where the company is controlled from. Since Apple New Zealand is owned by a parent company in Australia, the taxes for both countries are paid to the Australian Tax Office.

While legal, the lack of tax payment in New Zealand has been questioned by critics. Massey University senior lecturer and Labour Party candidate Deborah Russel suggests "They're operating completely legally; it's just that age-old distinction between legality and morality."

Portion of Apple New Zealand's financial statement highlighting Australian tax rate
Portion of Apple New Zealand's financial statement highlighting Australian tax rate


"It is absolutely extraordinary that they are able to get away with paying zero tax in this country," said Green Party co-leader James Shaw. "I really like Apple products - they're incredibly innovative - but it looks like their tax department is even more innovative than their product designers."

A spokesperson for Apple Australia told the report "Apple aims to be a force for good and we're proud of the contributions we've made in New Zealand over the past decade. Because our products and services are created, designed, and engineered in the U.S., that's where the vast majority of our tax is paid."

The issue of tax avoidance is already being tackled in the country, after Revenue Minister Judith Collins recently proposed tax reforms to curb the practice. "The new measures proposed earlier this month will help ensure that multinationals with a large Internet footprint will be taxable on the profits from their New Zealand sales when they have people working for them in New Zealand."

Apple's tax affairs have come under fire in a number of countries around the world, as it tries to minimize its payments. One of the more notable cases of this is its ongoing fight in Ireland, where the European Commission ruled the country charged Apple an illegally low rate of tax for a number of years, and demanded the repayment of 13 billion euro ($14 billion) in back taxes.

Both Apple and Ireland have appealed the Commission's ruling, which Irish tax advisors believe could be overturned by the European Court of Justice within four to five years.
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Comments

  • Reply 1 of 34
    JanNLJanNL Posts: 114member
    How original... is every country looking at it's own tax regime going after Apple?
    edited March 20 SpamSandwichjbdragon
  • Reply 2 of 34
    boredumbboredumb Posts: 1,319member
    I'm sort of hoping Professor Russel will explain how paying taxes per the law, and thereby at a higher rate, is 'immoral'.
    mike1williamhStrangeDaysteejay2012SpamSandwichrandominternetpersonjbdragonwatto_cobra
  • Reply 3 of 34
    JanNL said:
    How original... is every country looking at it's own tax regime going after Apple?
    You need to start using logic before spewing any words. You do business in some country that allows you to take revenue then you pay there tax. Tax is bound to location of your business revenue - not an option to have one here and other elswhere. Simple or still problem with comprehending?
    adm1propod
  • Reply 4 of 34
    boredumb said:
    I'm sort of hoping Professor Russel will explain how paying taxes per the law, and thereby at a higher rate, is 'immoral'.
    Perhaps re-read article, get some education what tax is and how it is applied and apply logic instead of asking for explaining basics. It is not higher or on pink paper that you may or may not like - it is for the fact that you are ALLOWED to do business and take revenue somewhere. There is no "option to pay... or elswhere".
    This country bound policy that apparently wants to play fair for other business that take revenue and pay taxes it in New Zealand. Simple?
    adm1
  • Reply 5 of 34
    Do not want to pay tax in some country - do not do business with revenue there. This is as simple as this.
  • Reply 6 of 34
    great fake news headline there
    randominternetperson
  • Reply 7 of 34
    mike1mike1 Posts: 1,153member
    Do not want to pay tax in some country - do not do business with revenue there. This is as simple as this.
    " treaty between Australia and New Zealand over dual income tax claims default payments to the country where the company is controlled from. Since Apple New Zealand is owned by a parent company in Australia, the taxes for both countries are paid to the Australian Tax Office. "

    Sounds more like NZ needs to revisit the agreement with Australia.

    StrangeDaysteejay2012lostkiwirandominternetpersonmac_dogjbdragonsandorapple jockeyration al
  • Reply 8 of 34
    Do not want to pay tax in some country - do not do business with revenue there. This is as simple as this.
    What is even more simple is this:
    The arrangement is legal, as a treaty between Australia and New Zealand over dual income tax claims default payments to the country where the company is controlled from. Since Apple New Zealand is owned by a parent company in Australia, the taxes for both countries are paid to the Australian Tax Office. 

    If the above quote is true then Apple is just following the law. If New Zealand doesn't like this law then they shouldn't have made it in the first place. If they did not intend for the law to be used in this way then they should just introduce new legislation to limit the scope. It's that simple.

    cognomen42adrayvenwilliamhStrangeDaysteejay2012jbdragonapple jockeywatto_cobraration al
  • Reply 9 of 34
    hriw-annon@xs4all.nlhriw-annon@xs4all.nl Posts: 3unconfirmed, member
    maciekskontakt said:
    boredumb said:
    I'm sort of hoping Professor Russel will explain how paying taxes per the law, and thereby at a higher rate, is 'immoral'.
    Perhaps re-read article, get some education what tax is and how it is applied and apply logic instead of asking for explaining basics. It is not higher or on pink paper that you may or may not like - it is for the fact that you are ALLOWED to do business and take revenue somewhere. There is no "option to pay... or elswhere".
    This country bound policy that apparently wants to play fair for other business that take revenue and pay taxes it in New Zealand. Simple?
    Maybe you should have taken some English lessons before posting? Just an idea.

    Anyway,
    if you are unhappy with how much taxes a company pays and it's illegal you sue them and/or seize their assets, if it's legal you get the tax code changed.
    Whining about big bad companies not paying more that the tax code says they should is idiotic.

    jbdragonwatto_cobra
  • Reply 10 of 34
    JanNLJanNL Posts: 114member
    JanNL said:
    How original... is every country looking at it's own tax regime going after Apple?
    You need to start using logic before spewing any words. You do business in some country that allows you to take revenue then you pay there tax. Tax is bound to location of your business revenue - not an option to have one here and other elswhere. Simple or still problem with comprehending?
    Maybe you need to start a course in comprehensive reading... Then you would have understood the article mentioning the treaty and my remark.
    mac_dogjbdragonwatto_cobra
  • Reply 11 of 34
    buzdotsbuzdots Posts: 401member
    maciekskontakt said:
    boredumb said:
    I'm sort of hoping Professor Russel will explain how paying taxes per the law, and thereby at a higher rate, is 'immoral'.
    Perhaps re-read article, get some education what tax is and how it is applied and apply logic instead of asking for explaining basics. It is not higher or on pink paper that you may or may not like - it is for the fact that you are ALLOWED to do business and take revenue somewhere. There is no "option to pay... or elswhere".
    This country bound policy that apparently wants to play fair for other business that take revenue and pay taxes it in New Zealand. Simple?
    Maybe you should have taken some English lessons before posting? Just an idea.

    Anyway,
    if you are unhappy with how much taxes a company pays and it's illegal you sue them and/or seize their assets, if it's legal you get the tax code changed.
    Whining about big bad companies not paying more that the tax code says they should is idiotic.

    I'm guessing maciekskontakt doesn't comprehend sarcasm very well...
    watto_cobra
  • Reply 12 of 34
    larryjwlarryjw Posts: 98member
    Seems like Australia should be sending money to NZ. 
    mac_dog
  • Reply 13 of 34
    Is this article saying Apple should pay 30% to Australia and 28% to New Zealand for a total of 48% in taxes?
  • Reply 14 of 34
    boltsfan17boltsfan17 Posts: 1,246member
    Donvermo said:
    Do not want to pay tax in some country - do not do business with revenue there. This is as simple as this.
    What is even more simple is this:
    The arrangement is legal, as a treaty between Australia and New Zealand over dual income tax claims default payments to the country where the company is controlled from. Since Apple New Zealand is owned by a parent company in Australia, the taxes for both countries are paid to the Australian Tax Office. 

    If the above quote is true then Apple is just following the law. If New Zealand doesn't like this law then they shouldn't have made it in the first place. If they did not intend for the law to be used in this way then they should just introduce new legislation to limit the scope. It's that simple.

    So true. I always find it funny how companies like Apple are just following tax laws, yet somehow they are perceived to be these evil tax dodgers by morons like this Deborah Russel clown. The problem isn't Apple, its the people who make these laws, yet do nothing to change them. 
    mac_dogwatto_cobra
  • Reply 15 of 34
    StrangeDaysStrangeDays Posts: 1,102member
    Do not want to pay tax in some country - do not do business with revenue there. This is as simple as this.
    But the law there says if your company is based in Australia then you can pay taxes there instead. How is that not as simple a concept?
    mac_dogwatto_cobra
  • Reply 16 of 34
    jungmarkjungmark Posts: 6,323member
    That's why we have laws. If the law is flawed, change it. Morals should have no impact. People's morals are different. I won't mention politics. 
  • Reply 17 of 34
    jungmarkjungmark Posts: 6,323member
    boredumb said:
    I'm sort of hoping Professor Russel will explain how paying taxes per the law, and thereby at a higher rate, is 'immoral'.
    Perhaps re-read article, get some education what tax is and how it is applied and apply logic instead of asking for explaining basics. It is not higher or on pink paper that you may or may not like - it is for the fact that you are ALLOWED to do business and take revenue somewhere. There is no "option to pay... or elswhere".
    This country bound policy that apparently wants to play fair for other business that take revenue and pay taxes it in New Zealand. Simple?
    Ironic. Please re-read the article. NZ and Aus have a deal. 
    watto_cobra
  • Reply 18 of 34
    davidwdavidw Posts: 876member
    mretondo said:
    Is this article saying Apple should pay 30% to Australia and 28% to New Zealand for a total of 48% in taxes?
    No, And not only because 30% plus 28% doesn't add up to 48%.

    The article is only talking about the income tax that Apple has to pay on New Zealand's profits. Because of some tax treaty between Australia and New Zealand, Australian companies doing business in New Zealand can pay the taxes on their New Zealand profits to Australia. And I assume the opposite is true and New Zealand companies can pay the tax on their Australian profits to New Zealand. This prevents being taxed twice on the profits made between the two countries. 

    Since New Zealand Apple is part of Australia Apple, Apple pays the tax on their new Zealand profits in Australia. Which happens to be 2% more than if Apple had paid the tax to New Zealand.   (30% vs 28%)

    But some one here thinks New Zealand Apple paid no taxes on their profit at all. 
    edited March 20 watto_cobra
  • Reply 19 of 34
    T.j.p.T.j.p. Posts: 14member
    Do not want to pay tax in some country - do not do business with revenue there. This is as simple as this.
    Seems to me it is NZ wanting to revisit the treaty with Aussies that is in order. Apple can't afford to pay taxes both were legally obligated to (at 2% higher than NZ) and were people feel they are morally obligated to pay as well. 58% might be a bit much. Does Austrailia feed any of this collected tax back to New Zealand? If not why do this treaty at all? At some point it must have seemed logical.
    watto_cobraration al
  • Reply 20 of 34
    davidwdavidw Posts: 876member
    T.j.p. said:
    Do not want to pay tax in some country - do not do business with revenue there. This is as simple as this.
    Seems to me it is NZ wanting to revisit the treaty with Aussies that is in order. Apple can't afford to pay taxes both were legally obligated to (at 2% higher than NZ) and were people feel they are morally obligated to pay as well. 58% might be a bit much. Does Austrailia feed any of this collected tax back to New Zealand? If not why do this treaty at all? At some point it must have seemed logical.
    My guess is that the treaty also allows New Zealand based companies to pay the taxes on their Australian profits to New Zealand. In which case New Zealand may benefit more as there's more profits to be made in Australia than in New Zealand. But on the other hand, there's probably more Auatralian companies doing business in New Zealand than the other way around. So it might be a wash. In which case, I don't think New Zealand is get the worse end of the treaty than it seems, just based on Apple.
    watto_cobraration al
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