Apple Australia recorded a gross tax rate of slightly more than 1 percent in 2015, Australian government records indicate, focusing attention once again on the iPhone maker's international tax strategy.
Apple sent just AU$85 million ($59 million) to Australian government coffers last year after recording revenues of AU$7.9 billion, according to the Sydney Morning Herald. Apple Australia reported an after-tax profit of AU$123 million, a AU$51.5 million year-over-year decline.
Corporate taxes are not calculated on gross revenue. $85 million is more than 1% of $208 million.
Yeah, but tax eaters gotta eat. Fairfax (publisher of the Sydney Morning Herald) is in financial trouble. This level of financial illiteracy is one of the many reasons why. The Murdoch press isn't any better. I think it is a general problem with journalism schools, which seem to promote a sort of quaint cultural Marxism, where they it is a noble goal to take as much of the little red hen's bread as possible.
Gator: quite frankly we would need to better understand what Apple is doing and the "spirit of the law" to properly respond. My guess is that yes, Apple is ,but governments want as much as they can get and how multinational transactions should get treated is arguable.
Consider this hypothetical: You make some sort of thing in the US and that thing has high development costs and relatively low manufacturing costs. Let's say it sells for $100, costs you $40 to build, but the development and support was another $30 per unit. The things are built in China (for $40) and sold in Australia (for $100).
Does that matter in this event? In Apple's case isn't the development and support already factored into the price? Why would it cost Apple much if anything more to sell a product in Australia than say the UK or even the US?
I'm not saying it costs more to sell in Australia than in the UK. I'm just saying that Apple Corporation, the US company, should be making some US profit on that Australian transaction.
To my mind, the dispute is over how much of the profit is earned in Australia vs the US and elsewhere. Apple Australia is a company in its own right, based in Sydney. Apple Australia has to make a profit and pay taxes on that profit. (Not only that, but it should be a better arrangement than simply working through existing Australian 3rd parties or why do this at all?) Should Apple US sell products to Apple Australia at or below its own cost?
Consider what the parties have done: Apple US has developed and built the product,and provides ongoing updates. Apple Australia has stocked the product, sold it to a customer, and provides after-sales support. Both are important. To my mind, the product should be sold to Apple Australia at a price similar to what it sells the product to any other reseller, and the taxation of profits would be very straightforward.
Show me proof that Apple 'lied' on their taxes. Show me. If not STFU.
Apple's profit numbers in Australia are a lie, that is evident. There are plenty of admissible lies. Deferring income to another tax season is a lie, but one that is accepted in certain circumstances. Australia has some very strict transfer pricing laws, so are you sure that Apple did nothing illegal? Your tone suggests to me that you're taking an emotive stance on this rather than an informed one.
I might say it's evident that you are a fascist jackass taking emotive stances rather than informed ones, but I've only got a bit of your writing to go by so that would be an emotive stance. There is no reason why Apple should maximize its tax liability in every jurisdiction. It's not Apple's fault that governments around the world have made promises they can't keep. Everything doesn't belong to your government.
Apple's profit numbers in Australia are a lie, that is evident. There are plenty of admissible lies. Deferring income to another tax season is a lie, but one that is accepted in certain circumstances. Australia has some very strict transfer pricing laws, so are you sure that Apple did nothing illegal? Your tone suggests to me that you're taking an emotive stance on this rather than an informed one.
I might say it's evident that you are a fascist jackass taking emotive stances rather than informed ones, but I've only got a bit of your writing to go by so that would be an emotive stance. There is no reason why Apple should maximize its tax liability in every jurisdiction. It's not Apple's fault that governments around the world have made promises they can't keep. Everything doesn't belong to your government.
By all means call me names, it doesn't make your argument any better. No one is arguing that Apple should maximise its tax liability, and government promises have little to do with anything.
By all means call me names, it doesn't make your argument any better. No one is arguing that Apple should maximise its tax liability, and government promises have little to do with anything.
You are still dodging my question.
If the laws that Apple is following are so unfair and ridiculous why don't the lawmakers change the laws?
I don't see anywhere where you've asked me that question, so I've hardly been dodging it.
But since you've asked now:
1. Who says the laws are unfair and ridiculous? This story is about Apple being audited, so the obvious implication is that the authorities think they aren't being compliant, and the laws may well be sufficient. I don't know enough about Australian taxation to comment much either way, but I have heard it said before that they have some of the toughest transfer pricing legislation around. 2. A complete and equitable tax system is a complicated thing, possibly an impossible thing in totality. There are legions of people whose purpose in employment is to find ways round tax rules, and only a fraction of that working to make the tax rules better. 3. Laws take time to change in any democratic government system. 4. As a general observation, Western governments are currently dominated by neoliberal economic thinking that has little interest in reforming corporate taxation in any direction but down.
If the laws that Apple is following are so unfair and ridiculous why don't the lawmakers change the laws?
I don't see anywhere where you've asked me that question, so I've hardly been dodging it.
But since you've asked now:
1. Who says the laws are unfair and ridiculous? This story is about Apple being audited, so the obvious implication is that the authorities think they aren't being compliant, and the laws may well be sufficient. I don't know enough about Australian taxation to comment much either way, but I have heard it said before that they have some of the toughest transfer pricing legislation around. 2. A complete and equitable tax system is a complicated thing, possibly an impossible thing in totality. There are legions of people whose purpose in employment is to find ways round tax rules, and only a fraction of that working to make the tax rules better. 3. Laws take time to change in any democratic government system. 4. As a general observation, Western governments are currently dominated by neoliberal economic thinking that has little interest in reforming corporate taxation in any direction but down.
Hey @sog35, I answered the question that you never asked me. Care to respond?
Comments
To my mind, the dispute is over how much of the profit is earned in Australia vs the US and elsewhere. Apple Australia is a company in its own right, based in Sydney. Apple Australia has to make a profit and pay taxes on that profit. (Not only that, but it should be a better arrangement than simply working through existing Australian 3rd parties or why do this at all?) Should Apple US sell products to Apple Australia at or below its own cost?
Consider what the parties have done: Apple US has developed and built the product,and provides ongoing updates. Apple Australia has stocked the product, sold it to a customer, and provides after-sales support. Both are important. To my mind, the product should be sold to Apple Australia at a price similar to what it sells the product to any other reseller, and the taxation of profits would be very straightforward.
But since you've asked now:
1. Who says the laws are unfair and ridiculous? This story is about Apple being audited, so the obvious implication is that the authorities think they aren't being compliant, and the laws may well be sufficient. I don't know enough about Australian taxation to comment much either way, but I have heard it said before that they have some of the toughest transfer pricing legislation around.
2. A complete and equitable tax system is a complicated thing, possibly an impossible thing in totality. There are legions of people whose purpose in employment is to find ways round tax rules, and only a fraction of that working to make the tax rules better.
3. Laws take time to change in any democratic government system.
4. As a general observation, Western governments are currently dominated by neoliberal economic thinking that has little interest in reforming corporate taxation in any direction but down.
Singapore's citizens benefit from taxes collected there, we are looking at being slugged with a 50% markup in GST to make up the shortfall.
Our corporate friendly government wants to lower the tax rate.
We are milk cows, to be duped of our money.
Here's a salient article on people that take advantage of 'loopholes':
http://www.news.com.au/finance/business/banking/daniel-saunders-jailed-after-spending-16-million-he-obtained-through-a-secret-atm-loophole/news-story/82393179f494e0a8114daab01817bfac