Apple's $59M Australian tax bill in the spotlight as international tax row continues

Apple Australia recorded a gross tax rate of slightly more than 1 percent in 2015, Australian government records indicate, focusing attention once again on the iPhone maker's international tax strategy.

Apple sent just AU$85 million ($59 million) to Australian government coffers last year after recording revenues of AU$7.9 billion, according to the Sydney Morning Herald. Apple Australia reported an after-tax profit of AU$123 million, a AU$51.5 million year-over-year decline.

The iPhone maker — along with a number of other major multinational firms — has come under fire from governments around the world in recent years over its tax avoidance strategies. Using legal loopholes and complex arrangements of foreign affiliates, companies like Apple and Google can achieve effective tax rates far lower than the statutory rates.

Last year, Apple warned investors that one ongoing investigation into the company's tax arrangements with the Irish government could lead to a penalty which would have a "material" impact on Apple's bottom line.

Down under, Apple, Google, and other foreign tech firms are facing a legislative backlash over their tax policies. The Australian Tax Office has begun more aggressive audits, currently focusing on Apple's 2012 accounts.

"The Australian Taxation Office is currently auditing the company's tax position for 2012," Apple's most recent filing read. "As at the date of this report, the outcome of the tax audit cannot be predicted with certainty and reliably estimated, no adjustments have been recognised in the financial statements."

An Apple spokesperson told the Herald that "Apple Australia pays all taxes it owes in accordance with Australian law."

50 Comments

cnocbui 3612 comments · 17 Years

About 8 years ago

That's 'taking the piss'.

I propose that where a company declares income greater than AU$100 M on finished manufactured goods and their profit to be less than 25% of that income, just tax them at 20% of income.

williamh 1045 comments · 13 Years

AppleInsider said:

Apple Australia recorded a gross tax rate of slightly more than 1 percent in 2015, Australian government records indicate, focusing attention once again on the iPhone maker's international tax strategy.

Apple sent just AU$85 million ($59 million) to Australian government coffers last year after recording revenues of AU$7.9 billion, according to the Sydney Morning Herald. Apple Australia reported an after-tax profit of AU$123 million, a AU$51.5 million year-over-year decline.

Corporate taxes are not calculated on gross revenue. $85 million is more than 1% of $208 million.

williamh said:

cnocbui said:

That's 'taking the piss'.

I propose that where a company declares income greater than AU$100 M on finished manufactured goods and their profit to be less than 25% of that income, just tax them at 20% of income.

I guess you just want higher prices and fewer choices, right? You are proposing that Australia levy a tax that is higher than a company's profit or else mandate that the profit margin be greater than 25%? Does that really make sense to you?

When they are clearly lying about their profit - you betcha.

gatorguy 24612 comments · 13 Years

williamh said:

AppleInsider said:

Apple Australia recorded a gross tax rate of slightly more than 1 percent in 2015, Australian government records indicate, focusing attention once again on the iPhone maker's international tax strategy.

Apple sent just AU$85 million ($59 million) to Australian government coffers last year after recording revenues of AU$7.9 billion, according to the Sydney Morning Herald. Apple Australia reported an after-tax profit of AU$123 million, a AU$51.5 million year-over-year decline.

Corporate taxes are not calculated on gross revenue. $85 million is more than 1% of $208 million.

Curious if you think it's realistic for Apple to have a relatively piddling profit on the nearly AUS$8B in 2015 revenues without some really creative revenue shifting and transfer pricing? I'm sure you're not surprised the Aussies might think something's not right, and in any case it seems at odds with Mr Cook's claim they Apple doesn't make use of tax havens and accounting tricks.

"We don't use tax gimmicks," Cook said. "We pay all the taxes we owe, every single dollar. We don't just comply with the law, we comply with the spirit of the law."

rob53 3307 comments · 13 Years

Fine, the Australian Tax Office is doing an audit. I doubt Apple knowingly broke any tax laws but I can guarantee they used every tax law to their benefit and to the benefit of their stock holders. (See other forums about Apple's fiduciary responsibility to its shareholders to pay as little tax as legally required.) I'm sure Australia's tax laws are as mixed up and stupid as everyone else's so when the audit is done and after Apple appeals, we might find out how bad of a job Australia did in writing their tax laws. This is an embarrassment for the country and they'll attempt to cover up as many mistakes as they can, just like in the EU and the US. Australia, just like Ireland, wants a huge company like Apple to be in their country so they gave them special concessions, just like every state in the US does, to get them to come and build their. Why do you think companies build in Nevada? It's not for the scenery, it's because the of taxes. Why did Apple build a huge data center in North Carolina? Because they were given all sorts of tax concessions. Historically, this was called greasing the wheels and included bribes and other payments to get politicians to give them the breaks. Now, these large companies only have to promise to bring jobs to the area and politicians will give them the key to the city as well as low taxes and other concessions. This is happening all over the world and is the way business is done. Why is it such a big deal? Oh wait, I forgot about that magic word--greed.