Just show what tax law they broke. Then throw the book at them.
It is not about throwing book now. It is now how to get money back from Australia and to pay them correctly to New Zealand where Apple really owes and was misled to pay in Australia.
Of course banks don't collect taxes. They just use their financial pull to induce government to put pressure on their competition, or exert leverage on one entity or other that they've otherwise been unable to force to do what the bank wants done.
So let me get this right. You think that the big banks are coercing the Australian Government to go after Apple for back taxes in order to encourage them to come to the negotiating table over NFC access?
Another report recently noted that Apple has paid no income taxes in New Zealand for the last 10 years, and in fact chosen to pay that money in Australia, where the New Zealand division's parent company is based.
To be clear about this, Apple didn't choose to pay that money to Australia. It was required by New Zealand and Australian law (i.e. by the Double Tax Agreement which they've enacted into law) to pay that money to Australia. The effect of that agreement is that, if a company operates in a certain fashion then it pays its taxes (on New Zealand and Australian income) to one or the other of those nations. If it operates in a different fashion, then it might pay income taxes to both nations.
Apple could, of course, change the way it operates in New Zealand such that it could pay those taxes to New Zealand instead (and perhaps save a few bucks). But as it is - based on the way Apple operates in New Zealand, i.e. because it doesn't have enough of a operational presence there - Apple is supposed to pay those taxes to Australia. It's not a situation where those nations' laws allow Apple to pay those taxes to whichever nation it wants to. The question is: How does Apple operate in New Zealand and in Australia? The answer to that question determines where it has to pay taxes (i.e. whether it pays them to New Zealand, to Australia, or to both).
Okay, so we have the Australian government lawsuit over the ‘Error 53’ issue, the big Australian banks wanting to force Apple to let them use TouchID for their own purposes, and now an Australian tax avoidance lawsuit coming if Apple doesn’t comply. Sounds like coordinated attacks to me. I wonder what’s behind all of this.
The banks lost the NFC access lawsuit (as they should have)
Under Australian tax law, you need to comply with the intent , not just the letter of the tax code, and the tax office can effectively retrospectively change the law.
Essentially, the ATO is taking the position that transfer pricing between subsidiaries , is used to reduce tax, and shift taxable income to low tax jurisdictions . They are hitting up lots of companies , of which Apple is one - including g Australian companies that do the same thing.
The ACCC position is very clear , and the consumer protection law in Australia is pretty strong . All the good stuff Apple does doesn't count as credit for the handful of things they do that are wrong or illegal
All the banks have lost so far is the right to negotiate as a bloc. Under our competition laws, financial institutions are strictly controlled on how they can operate, and the ACCC have said that if they operate in these negotiations as a group, they will be deemed to be a cartel and penalised. The actual decision regarding access to the NFC components on the iPhone has not been reached.
The Error 53 problem is less clear, as I think part of it rests on whether Apple expected Error 53 to happen, and whether they communicated that it might well enough. At the time, a lot was made of the fact it didn't look like a "finished" error message, suggesting no one at Apple had expected to see it outside the research lab. It's possible they just didn't consider it a possibility, even taking into account phones fixed by third parties, or it might be that they saw an opportunity to shaft people who didn't get servicing done by Apple. (I don't think this latter is true, but a lot of people seem to.)
Another report recently noted that Apple has paid no income taxes in New Zealand for the last 10 years, and in fact chosen to pay that money in Australia, where the New Zealand division's parent company is based.
To be clear about this, Apple didn't choose to pay that money to Australia. It was required by New Zealand and Australian law (i.e. by the Double Tax Agreement which they've enacted into law) to pay that money to Australia. The effect of that agreement is that, if a company operates in a certain fashion then it pays its taxes (on New Zealand and Australian income) to one or the other of those nations. If it operates in a different fashion, then it might pay income taxes to both nations.
Apple could, of course, change the way it operates in New Zealand such that it could pay those taxes to New Zealand instead (and perhaps save a few bucks). But as it is - based on the way Apple operates in New Zealand, i.e. because it doesn't have enough of a operational presence there - Apple is supposed to pay those taxes to Australia. It's not a situation where those nations' laws allow Apple to pay those taxes to whichever nation it wants to. The question is: How does Apple operate in New Zealand and in Australia? The answer to that question determines where it has to pay taxes (i.e. whether it pays them to New Zealand, to Australia, or to both).
From my reading of the original story, they actually pay more in corporate taxes in Australia than they would if they paid the New Zealand taxes to New Zealand. This may be because it's easier. From memory of my own situation paying tax on foreign income (as an individual, not a corporation so it may not be valid), the tax owed was the higher of the foreign tax due and the Australian tax due (with credits for tax payments in the country the income came from). As Apple NZ is operated by Apple Aus, and thus Apple Aus would have to declare the income from Apple NZ anyway, and pay the shortfall between the NZ corporate rate and the Aus corporate rate to the ATO. This way, they avoid double handling, but the tax due in New Zealand does not go directly to New Zealand. (I don't know if we send them a cheque for all the amounts thus collected, or take it into account in trade deals, or just use it to fund dole payments at the Bondi Comcare office.)
I don't know how, or if any, of the above applies to the other companies mentioned. I suspect Google and Microsoft have the same corporate arrangements, but Rio Tinto and BHP Billiton are in a whole different ball game. I think BHP moved to the London Stock Exchange some time after they merged with Billiton, and I'm not sure how their local operations work. Also, the amounts of money are probably much bigger, given that they are mining companies with massive contracts for mineral exploitation all over the world.
I like Apple, and I want to continue to be able to buy their products locally. I also like the idea of corporations paying tax where they earn the income, to help fund infrastructure and government services in those communities. I'd like to see some, if not all, of the loopholes exploited by big, multinational companies closed. Whether this is the right way to go about the former isn't clear. It's certainly not going to fix the latter, and I wouldn't hold my breath waiting for this current lot to do anything about it.
Under Australian tax law, you need to comply with the intent , not just the letter of the tax code, and the tax office can effectively retrospectively change the law.
Subjective law. Oh joy. Now, not only must a company comply with what is written, but they must employ telepaths to determine what the lawmakers actually meant when they wrote the law.
Under Australian tax law, you need to comply with the intent , not just the letter of the tax code, and the tax office can effectively retrospectively change the law.
Subjective law. Oh joy. Now, not only must a company comply with what is written, but they must employ telepaths to determine what the lawmakers actually meant when they wrote the law.
Mr Cook already stated under oath that they comply not just with the law but with the spirit of the law. So yeah they must already be doing that.
Comments
Riiiiight...
Apple could, of course, change the way it operates in New Zealand such that it could pay those taxes to New Zealand instead (and perhaps save a few bucks). But as it is - based on the way Apple operates in New Zealand, i.e. because it doesn't have enough of a operational presence there - Apple is supposed to pay those taxes to Australia. It's not a situation where those nations' laws allow Apple to pay those taxes to whichever nation it wants to. The question is: How does Apple operate in New Zealand and in Australia? The answer to that question determines where it has to pay taxes (i.e. whether it pays them to New Zealand, to Australia, or to both).
All the banks have lost so far is the right to negotiate as a bloc. Under our competition laws, financial institutions are strictly controlled on how they can operate, and the ACCC have said that if they operate in these negotiations as a group, they will be deemed to be a cartel and penalised. The actual decision regarding access to the NFC components on the iPhone has not been reached.
The Error 53 problem is less clear, as I think part of it rests on whether Apple expected Error 53 to happen, and whether they communicated that it might well enough. At the time, a lot was made of the fact it didn't look like a "finished" error message, suggesting no one at Apple had expected to see it outside the research lab. It's possible they just didn't consider it a possibility, even taking into account phones fixed by third parties, or it might be that they saw an opportunity to shaft people who didn't get servicing done by Apple. (I don't think this latter is true, but a lot of people seem to.)
From my reading of the original story, they actually pay more in corporate taxes in Australia than they would if they paid the New Zealand taxes to New Zealand. This may be because it's easier. From memory of my own situation paying tax on foreign income (as an individual, not a corporation so it may not be valid), the tax owed was the higher of the foreign tax due and the Australian tax due (with credits for tax payments in the country the income came from). As Apple NZ is operated by Apple Aus, and thus Apple Aus would have to declare the income from Apple NZ anyway, and pay the shortfall between the NZ corporate rate and the Aus corporate rate to the ATO. This way, they avoid double handling, but the tax due in New Zealand does not go directly to New Zealand. (I don't know if we send them a cheque for all the amounts thus collected, or take it into account in trade deals, or just use it to fund dole payments at the Bondi Comcare office.)
I don't know how, or if any, of the above applies to the other companies mentioned. I suspect Google and Microsoft have the same corporate arrangements, but Rio Tinto and BHP Billiton are in a whole different ball game. I think BHP moved to the London Stock Exchange some time after they merged with Billiton, and I'm not sure how their local operations work. Also, the amounts of money are probably much bigger, given that they are mining companies with massive contracts for mineral exploitation all over the world.
I like Apple, and I want to continue to be able to buy their products locally. I also like the idea of corporations paying tax where they earn the income, to help fund infrastructure and government services in those communities. I'd like to see some, if not all, of the loopholes exploited by big, multinational companies closed. Whether this is the right way to go about the former isn't clear. It's certainly not going to fix the latter, and I wouldn't hold my breath waiting for this current lot to do anything about it.
Subjective law. Oh joy. Now, not only must a company comply with what is written, but they must employ telepaths to determine what the lawmakers actually meant when they wrote the law.