The New Zealand Herald’s analysis of the local subsidiary’s financial statements has revealed that for the last ten years, Apple paid taxes to the Australian Tax Office instead of New Zealand’s Inland Revenue. The Cupertino company appears to have paid out $37 million in income taxes from sales generated in New Zealand, but to Australia’s tax authority.
Since 2007, Apple’s sales in New Zealand have totaled $4.2 billion.
“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,” said a spokesperson for the Cupertino firm.
“Because our products and services are created, designed and engineered in the US, that’s where the vast majority of our tax is paid.”
What the documents clearly reveal are tax payments of $37 million that were sent abroad to the Australian Tax Office. The publication states that this is part of an arrangement between Apple and the governments of Australia and New Zealand that has been in place since at least 2007.
Money is the likely reason for this move as Apple sold billions of dollars worth of iPhones and iPads to New Zealanders over the past decade. “Had Apple reported the same healthy profit margin in New Zealand as it did for its operations globally it would have paid $356 million in taxes over the period,” reads the report.
The Cupertino company sold 221,000 phones in the country during the three months ending December 31, IDC estimated.
Green Party co-leader James Shaw said Apple was not paying its fair share.
“It is absolutely extraordinary that they are able to get away with paying zero tax in this country,” local Green Party co-leader James Shaw was quoted as saying. “I really like Apple products—they’re incredibly innovative—but it looks like their tax department is even more innovative than their product designers.”
On the other hand, Apple is operating completely legally.
“It’s just that age-old distinction between legality and morality,” noted Massey University senior lecturer and Labour Party candidate Deborah Russel.
Revenue Minister Judith Collins proposed tax reforms to curb this 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,” he said.
Apple is also on the hook for $14.5 billion in due taxes in the European Union. In 2016, the iPhone maker was fined $422 million by French watchdog over its controversial tax practices in the country.
Source: The New Zealand Herald