Apple paid taxes from New Zealand revenues to Australia for the last 10 years - report
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
"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.
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
"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.
Comments
This country bound policy that apparently wants to play fair for other business that take revenue and pay taxes it in New Zealand. Simple?
Sounds more like NZ needs to revisit the agreement with Australia.
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.
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.
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.