“US tech giant Apple has shifted an estimated $8.9 billion in untaxed profits from its Australian operations to a tax haven structure in Ireland in the last decade, an investigation by The Australian Financial Review has found,” Neil Chenoweth reports for The Australian Financial Review. “Last year Apple reported pretax earnings in Australia of only $88.5 million after it sent an estimated $2 billion of income from its Australian sales to Ireland via Singapore, where Apple negotiated a secret tax deal in 2009.”
“The Financial Review has obtained 10 years worth of financial accounts for Apple Sales International, the secretive Irish company at the heart of Apple’s international tax arrangements, which reveal the mark-up Apple charges for intellectual property on its products around the world,” Chenoweth reports. “Apple Sales International has reported more than $US100 billion ($112 billion) of profits in the last five years. Its accounts show it has paid less than 50¢ in tax on every $1000 of income.”
Chenoweth reports, “The company was the focus of a scathing report last May by the US Senate’s Committee on Homeland Security and Government Affairs, Permanent Subcommittee on Investigations.”
MacDailyNews Take: The US Senate’s “investigation” found no evidence that Apple did anything illegal.
Scathing.
Chenoweth reports, “In the four years from 2010 to 2013 Apple’s Australian arm, Apple Pty Ltd, reported to ASIC total sales of $20 billion and pre-tax profits of $387 million. The Financial Review analysis shows that Apple’s Australian arm paid an estimated $7.2 billion in profits to Apple Sales International in Ireland for “intangibles” over the same time frame. (Apple Sales International reports marketing, research and other expenses in Ireland.) In 2012 an estimated $2.3 billion was diverted tax-free to Apple Sales International, and $2 billion last year. In total, from 2002 to 2013, an estimated $8.9 billion of Australian income has been shifted to Ireland.”
“Apple Sales International and its parent, Apple Operations International, pay no tax in Ireland, according to Irish law, because they are managed and controlled in California. They pay no US tax either because US law disregards where a company is managed and only looks at where a company is legally registered,” Chenoweth reports. “Thus none of the profits which Apple moves to Ireland from Australia and elsewhere are taxable… There is no suggestion by the Financial Review that this arrangement is anything but proper within Australian tax laws.”
Read more in the full article here.
MacDailyNews Take: Legal.
Once again, if you do not like the laws, work to change them, but do not wrongly chastise Apple, implicitly or explicitly, for following the rule of law.
[Thanks to MacDailyNews Readers “Fred Mertz” and “James W.” for the heads up.]
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