Apple NZ pays 0.4% tax of its half-billion sales

closeThis article could be out of date, as it was published 1 year 6 months 9 days ago.

Apple Sales New Zealand, the local unit of the iPad and iPod maker, posted a 38 percent jump in full-year sales to $571 million, though the tax department received a payment amounting to just 0.4 percent of that.

Apple’s New Zealand sales topped the half billion dollar mark in 2012 after rising to $414 million in 2011, according to its financial results for the 12 months ended Sept. 29.

The local unit of the world’s biggest tech company recorded a tax paid profit of $5.5 million in the year, down 40 percent from its 2011 earnings. Income tax fell to $2.5 million, amounting to 31 percent of pretax earnings, from $5.1 million a year earlier.

Multinationals like Apple, Facebook, Starbucks and Google have come in for criticism for structuring their global businesses to minimise tax payments.

The New York Times last year named Apple as the inventor of the “Double Irish With a Dutch Sandwich” a term coined to describe a practise of reducing taxes by routing profits through Irish subsidiaries then the Netherlands and finally Caribbean tax havens.

While the structures are technically legal, the huge reduction in tax owed prompted the Organisation for Economic Cooperation and Development to call for a worldwide crackdown on that kind of behaviour.

It released a report into tax avoidance in February urging countries to work together to beat tax avoidance.

Revenue Minister Peter Dunne said last month that New Zealand will strongly align with OECD measures in tackling the issue of fairly taxing multi-nationals.

The Inland Revenue Department and Treasury released a report on taxation and multinationals in December.

“On a general level, companies like Apple are the kinds of companies both the IRD and the OECD are thinking of with these reports,” said Geof Nightingale, a partner at PwC in New Zealand. Taxation for multinationals has become very complicated, he added.

Apple NZ’s 2012 accounts show the vast bulk of revenue went back to other parties in the Apple group to pay for inventory. Purchases of products from within the group amounted to $551.7 million last year, amounting to 97 percent of the local unit’s sales.

Apple’s Australian spokeswoman Fiona Martin said the company doesn’t comment on its operating performance.

By Kristen Paterson – BusinessDesk

Follow Us
on Google+
Sponsored

Review: Sony Xperia Z2

NetGuide Smartphones are all about compromise these days. Fitting a hi-res screen, camera and huge battery into increasingly lighter handsets isn’t easy, and usually, something has to give.   Read More →

Review: LifeTrak C410 Fitness tracker

NetGuide The C410 is a fitness tracker first and a watch second. Because of this it not only tells the time, but also tracks almost everything a fitness nut would need to know.
Amongst the many stats tracked are Steps. Calories are measured too as are distances covered. There’s a sleep tracking function, plus heart rate monitoring.   Read More →

Android App Review: Writing Prompts

NetGuide Writing Prompts is one of those obviously-named apps that gives you exactly what the name suggests and nothing more. If you want some help getting started with your creative writing, then the Writing Prompts app might be able to help.   Read More →