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

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Comments

  • Reply 21 of 34
    SpamSandwichSpamSandwich Posts: 33,407member
    Taxes are not inherently moral.
  • Reply 22 of 34
    America had their elections now it's our turn.

    This is just typical political meandering by the Green Party who are trying everything they can to get into power. It's pretty coincidental that they are going after Apple this year as opposed to other years isn't it?  ;)
    edited March 2017 watto_cobra
  • Reply 23 of 34
    davidw said:
    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.
    This is exactly the case. By killing off the treaty they will screw themselves badly.

    Either way the New Zealand people as a whole won't be affected by any of this as the middle class pays the most tax anyway and they're not doing anything to fix that I see.
    watto_cobra
  • Reply 24 of 34
    buzdots said:
    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...

    I don't think there is any sarcasm here.  Just a poorly worded post by maciekskontakt that is nearly impossible to parse.
    watto_cobra
  • Reply 25 of 34
    mretondo said:
    Is this article saying Apple should pay 30% to Australia and 28% to New Zealand for a total of 48% in taxes?
    That comes to 58%, not 48%. 
  • Reply 26 of 34
    MarvinMarvin Posts: 14,739moderator
    Taxes are not inherently moral.
    It depends how far you detach them from what they pay for. They provide essential life-saving support for a large amount of people. They are also indirectly used to benefit the people who pay them, it's just offset by a generation or two. Everyone gets old, everyone gets sick, a lot of people have families, everybody needs education, everybody needs transport infrastructure, emergency services etc. While many things can be paid for privately, most people can't bear that burden directly because there are people who are against providing high enough salaries at the basic level to allow for this and usually that's the same people against higher taxes, they both have an impact on each other. The more impoverished a large group of people is made the more that group has to rely on public assistance to maintain the same basic quality of life.

    Some level of taxation is necessary for the operation of services that can only function properly being separated from a profit motive so the debate can only ever be about the level of taxation. I'd expect everybody would agree that there is a level of taxation that's too high and unfair. Most average employees will be paying around 25% and that's the highest that Apple pays. Whatever they are due elsewhere tends to be significantly lower and far from a burden to the wealthiest company in the world. The entire region that includes New Zealand is 6% of Apple's revenue and New Zealand is at most 1/6th of that and due tax is <1/3rd of the net income of that which is ~25% of that. <$200m per year. They didn't make this level of profit for 10 years so it's likely not over $1b total.

    That's not to say Apple is due to pay anything to New Zealand if they paid it elsewhere. As people have said, if they paid it in Australia then that's between New Zealand and Australia.
  • Reply 27 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?
    Not in this case. A bilateral agreement lets Apple NZ pay tax in Australia.
  • Reply 28 of 34
    EsquireCatsEsquireCats Posts: 1,241member
    I'm sorry but you can't blame Apple for the tax arrangements between Australia and New Zealand.

    It isn't about Apple being unethical, Apple is paying tax the way it should be, and actually paying more than if they operated from New Zealand. If Apple were solely in NZ, they'd be able to sell to Australia, yet only pay the federal tax rate of 28% - this time to the New Zealand government.

    You can't blame Apple for not having tax residence in both countries, Apple has chosen to operate from Australia and with that they pay 2% more tax for that decision, perhaps in time the NZ market will be big enough to get its own office - in that event Apple would pay taxes to both countries directly.

    If New Zealand is concerned about this, they should change their tax arrangement with Australia, but they stand to gain much more if they can convince businesses to set up in NZ rather than Australia.
    edited March 2017
  • Reply 29 of 34
    SpamSandwichSpamSandwich Posts: 33,407member
    Marvin said:
    Taxes are not inherently moral.
    It depends how far you detach them from what they pay for. They provide essential life-saving support for a large amount of people. They are also indirectly used to benefit the people who pay them, it's just offset by a generation or two. Everyone gets old, everyone gets sick, a lot of people have families, everybody needs education, everybody needs transport infrastructure, emergency services etc. While many things can be paid for privately, most people can't bear that burden directly because there are people who are against providing high enough salaries at the basic level to allow for this and usually that's the same people against higher taxes, they both have an impact on each other. The more impoverished a large group of people is made the more that group has to rely on public assistance to maintain the same basic quality of life.

    Some level of taxation is necessary for the operation of services that can only function properly being separated from a profit motive so the debate can only ever be about the level of taxation. I'd expect everybody would agree that there is a level of taxation that's too high and unfair. Most average employees will be paying around 25% and that's the highest that Apple pays. Whatever they are due elsewhere tends to be significantly lower and far from a burden to the wealthiest company in the world. The entire region that includes New Zealand is 6% of Apple's revenue and New Zealand is at most 1/6th of that and due tax is <1/3rd of the net income of that which is ~25% of that. <$200m per year. They didn't make this level of profit for 10 years so it's likely not over $1b total.

    That's not to say Apple is due to pay anything to New Zealand if they paid it elsewhere. As people have said, if they paid it in Australia then that's between New Zealand and Australia.
    As the colonists used to say, "No taxation without representation!"
  • Reply 30 of 34
    copelandcopeland Posts: 298member
    Anybody looked any closer to the numbers?
    $37m taxes at a tax rate of 30% equals to about $110m of profits. Apple is making only $110m on sales of $4.2b.
    Sorry but I can't believe that.
  • Reply 31 of 34
    avon b7avon b7 Posts: 6,167member
    With the exception of the Green Party co-leader, the rest of the people quoted in the newspaper article make it clear that their comments are not on the legality of the issue.

    After a very quick read of the news piece here, the newspaper article and Apple New Zealand's accounting notes, it seems contradictory on where those millions were actually paid (to Apple Australia or Apple Sales New Zealand) but perhaps we shouldn't be focusing on where the amount was paid but how much and on what total.

    The newspaper article also states that Apple avoided giving a direct answer to the points raised.

    Independently of where the 'legal' taxes were paid, the real issue is whether they followed a practice similar to the case in Ireland and seemingly pulled an figure out of a hat and said "we will pay taxes on this amount".

    Saying the products are designed in the US and that taxes are paid on where the 'ideas' come from just doesn't hold water. Many of the people doing the designing aren't even American. Should we take the argument one step further and say that as Ive is English, a part of taxes should go into the UK? And it is fairly clear anyway that Apple doesn't even pay taxes on much of what it has stockpiled away from the tax authorities. For that it is waiting for a 'repatriation deal'.

    So, after an admittedly cursory reading, the taxes paid may be 'legal' but what is very far from clear is the amount actually made available for taxation in the first place.


  • Reply 32 of 34
    mike1 said:
    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.

    Sounds like that is exactly what they are doing, this "report" was probably just one example of many produced to help officials decide and plan any tax changes. More FUD than news here.
  • Reply 33 of 34
    crowleycrowley Posts: 10,034member
    Seems like the treaty between Aus and NZ is designed to simplify matters and enable their relative domestic industries and companies, and might not be well suited for multinationals with regional offices.  That said (and I'm usually critical of Apple on tax  matters), this seems like a completely legal and reasonable thing that Apple is doing, no funny business at all.

    However...
    copeland said:
    Anybody looked any closer to the numbers?
    $37m taxes at a tax rate of 30% equals to about $110m of profits. Apple is making only $110m on sales of $4.2b.
    Sorry but I can't believe that.
    I agree that this is very suspicious.  Seems likely that there's some transfer pricing going on to another Apple operations centre.  Possibly Ireland, or maybe somewhere like Singapore as the local (tax friendly) regional hub.

  • Reply 34 of 34
    carnegiecarnegie Posts: 989member
    copeland said:
    Anybody looked any closer to the numbers?
    $37m taxes at a tax rate of 30% equals to about $110m of profits. Apple is making only $110m on sales of $4.2b.
    Sorry but I can't believe that.
    International tax law typically has income taxes for multinational corporations effectively apportioned based on where value is considered to be created. Often much of the profit from sales in a particular jurisdiction is effectively realized in a different jurisdiction - e.g., where the products were designed, where the IP used in them was created (or owned), where the brand value was created.

    That's why Apple, e.g., effectively pays income taxes in the United States on profits from sales of its products in other parts of the Americas. Apple pays a quite high tax rate when it comes to profits from sales in the Americas. It's also why Apple pays (in the aggregate) a very low tax rate (on a cash basis, not as much when considering deferred tax accounting) on profits from sales of its products in other parts of the world, as much of the profit from those sales is realized by Irish corporations.

    This is part of the reason, I believe, that many countries have implemented VATs. Their tax laws, consistent with how international tax law generally works, don't require corporations to pay income taxes there based simply on sales being made there - they allow, e.g., transfer pricing which affects were profits are accounted for. But VATs collect taxes based on sales being made there, regardless of where the profit from those sales is realized (whether legitimately or somewhat manipulatively).
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