“Australian tax authorities on Thursday took the unprecedented step of publishing the records of hundreds of companies, including Google Inc. and Apple Inc., which show they paid little or no tax on their in-country earnings,” Byron Kaye and Colin Packham report for Reuters. “Of more than 1,500 largely foreign-owned companies which reported total earnings over A$100 million ($72.11 million) in the 2014 financial year, more than a third paid no tax, the Australian Taxation Office data showed.”
“Australia has led efforts at the Group of 20 rich nations to close tax loopholes, but the ATO’s move appears to have caught ministers off-guard, coming in the same week as the government flagged spending cuts to rein in a budget blowout,” Kaye and Packham report. “‘Just because they don’t pay tax doesn’t mean that they are avoiding tax,’ Assistant Treasurer Kelly O’Dwyer told reporters, adding the government had strengthened the ATO’s powers to ensure corporations paid their dues. Commissioner of Taxation Chris Jordan criticized certain foreign-owned companies for being ‘overly aggressive in the way they structure their operations.'”
“Apple paid A$74 million tax on its A$247 million taxable income, in line with the country’s 30 percent tax rate but a small fraction of the total A$6.1 billion it made in Australia that year,” Kaye and Packham report. “Google paid A$9 million tax on A$91 million in taxable income, a third of the company tax rate and dwarfed by the A$357 million it made.”
Read more in the full article here.
MacDailyNews Take: If the cost of business goes up dramatically in certain countries, the cost of products paid by consumers in said countries likely will, too. See Brazil, for one example.
Newsflash: Corporations don’t pay taxes, you do. “Corporate taxes” are simply passed along to the consumer. It’s how the government sneakily double-taxes its citizens. You’re taxed on your income and then again on what’s left via higher prices across the board. — MacDailyNews Take, December 4, 2015
[Apple] pays all the taxes it owes, in accordance with Australian law. — Tony King, Apple VP, South Asia & Australia/NZ, April 8, 2015
SEE ALSO:
If Apple announces its corporate U.S. exit, will we finally get the message? – December 4, 2015
Think Ireland’s corporate tax is unfair? Wave goodbye to Apple and thousands of jobs if it’s changed – November 14, 2015
Apple announces 1,000 new jobs in Ireland as EU tax ruling nears – November 11, 2015
Apple tax probe won’t hurt Ireland, Finance Minister Noonan says – October 5, 2015
EU’s Vestager says will not complete tax inquiries of Apple, others in second quarter – May 5, 2015
Apple warns of potential ‘material’ financial damage from European tax probe – April 29, 2015
Apple may have to pay Ireland 10 years of back taxes – April 30, 2015
Ireland’s Prime Minister: Apple has nothing to fear from end of ‘Double Irish’ tax avoidance strategy – November 4, 2014
Apple says it may lose Irish tax break – October 31, 2014
Ireland to end tax lures that drew U.S. firms – October 14, 2014
EU tax probe spotlights Ireland’s allure for multinationals – October 13, 2014
EU watchdog to give reasons for inquiry into Ireland’s tax treatment of Apple – September 29, 2014
European Commission accuses Apple of prospering from illegal Irish tax deals – September 28, 2014
EU threatens expanded probe into Ireland’s tax practices regarding Apple, Googles, other companies – June 20, 2014
EU’s investigation of Apple’s taxes isn’t going to cause the company any problems – June 13, 2014
EU launches tax avoidance investigations on Apple, Starbucks, Fiat – June 11, 2014
Not in Taxes anymore: On site at Apple’s famous Irish ‘headquarters’ – November 2, 2013
Regan: U.S. tax code spurs loveless foreign corporate ‘marriages’ – May 13, 2014
Ireland to close Apple’s tax loophole, but leave bigger one open – October 15, 2013
G20 think tank OECD proposes blueprint for global crackdown on tax avoidance – July 19, 2013
Thomas Sowell on Apple, corporate taxes, and ‘the road to serfdom’ – May 28, 2013
Taxing Apple just taxes you – May 24, 2013
Don’t tax Apple, tax its shareholders – May 24, 2013
If Apple paid more tax, we might pay less or something – May 22, 2013
Apple CEO Tim Cook pounds another nail into the Keynesian coffin – May 22, 2013
Apple CEO Cook makes no apology for company’s tax strategy – May 22, 2013
Nothing wrong with that. We all should and do do this even without thinking. Avoid, good. Evade, bad. I’d AVOID a ton of bricks falling from the sky too. Wouldn’t you?
Indubitably.
And ALL corporations practice legal tax avoidance, not just some. Like there’s something wrong with that? That they should voluntarily pay more than they owe? CEO’s wouldn’t be doing their jobs otherwise bringing as much capitol back into the company as possible.
Like Greece?
Fraud is fraud whether it is practiced in Australia or Ireland.
Your statement is 100% correct, Peter. But what has it to do with Apple? Are you suggesting that Apple is “practicing” fraud? If so, please supply some details.
You’re an implying doofus without any proof other than your own Apple hating wishful thinking mentality.
Bloodsucking bureaucratic vampires are bloodsucking bureaucratic vampires whether they practice in Australia or Ireland.
Apple collects pays 10% GST on revenues which amounts to a lot more than the supposed corp tax omissions.
Apple doesn’t pay GST on revenue. It charges GST on revenue to its customers and passes it along to the Tax Office.
The tax avoidance referred to is the tax owing on the profit Apple makes on its sales in Australia.
The contention is that Apple and other companies’ corporate structure is such that it charges itself unduly high cost of goods from shell companies set up purely to collect “fees” such as IP rights, marketing costs, etc but which don’t actually employ anyone to perform those functions and at a rate which doesn’t accurately reflect the costs in any case.
This is used to reduce the Australian arm’s profit margin to near zero so that it doesn’t have to pay much corporate tax.
This is currently legal but still doesn’t “smell” nice. The solution is to have an international agreement for multinationals to pay tax on profits in the country in which they were earned but the USA is one of the biggest bottleneck as it insists on taxing repatriated profits even when tax has been paid in the country of origin.
Thus endeth my amateur lecture…
Newsflash: Corporations don’t pay taxes, you do. “Corporate taxes” are simply passed along to the consumer…..”
and so, we are to suppose that these inherently altruistic corporations will, should all taxes upon their profits be magically lifted, respond by lowering their prices by a like amount?
my guess is they would keep their prices right where they already were, under the principal of “increasing shareholder value”
Corporate taxes are paid by the shareholders, not the customers.
Shareholders get to pay it twice. Once as the corporation pays it and again as they pay their capital gains. So that income is taxed twice.
And I’ll be you have a retirement fund? We all what it to grow faster for retirement. But we’re all getting taxed twice on that income.
Quit forcing corporations from paying the tax, pass it straight to the shareholders, tax it once and we can get rid of all the pesky corporate tax attorneys that have the tax code all screwed up.
Prices on products would come down to consumers and everyone would be more efficient.
Oh wait! Government is against efficiency!
So? Most people don’t save or invest, if you invest at least you have something 65 to 75 percent of something to be taxed.
The point is that the tax increase is not passed on to the consumers in the form of higher prices.
Corporations, thanks to the tax dodges that get mentioned frequently here, pay little tax. For software companies it is something like 10% real. Most companies don’t want a simple tax code because they stand to lose some specific benefit that they like. And tax attorneys will fight it because it keeps them paid.
Overall, we would benefit from a simple tax code, especially the government, which has to spend a lot of money just keeping up with it. Due to special interests, we won’t change.
At least in Australia shareholders get “Franking Credits” https://moneysmart.gov.au/investing/shares/keeping-track-of-your-shares/dividends which means tax is paid once.
You nailed it, Doc. The burden of taxation is shifted, but the revenues are not. End result, the corporations increase profits for the shareholders – primarily the wealthy who make money from money – but the wages for the workers and the prices to consumers are not adjusted for that shift in taxation. The wealthy get wealthier, the poor get poorer, and the government runs at even larger deficits because the people who profess to be patriotic to the core somehow see fit to classify taxes as evil, even though they also profess to want a balanced budget. This situation is so twisted and nonsensical that it boggles the mind.
Keep squeezing the stone until the economic system collapses, folks. Then all of your hoarded profits will be worth squat. Karma is a bitch.
What corporations do with their profits are their, and their shareholders’, business; just as your “profits” (net income) is your, and your family’s business. If your net income increases (maybe by a payroll tax decrease) it’s your decision as to what to do with it. My guess is that you would not share it with outsiders on the theory of “increasing the value of your family’s net worth”.
No fraud, just using the law.
Please add me to that list too – I practice all the tax avoidance I can muster!
Taxation is difficult to get right. We OBVIOUSLY need taxes but Governments NOT companies craft these crazy tax laws. Simplicity is the only way to keep taxes fair, understandable and tax revenues predictable.. Stop making up all these crazy tax “INCENTIVES” (which is what “loophole” is BEFORE a company starts paying taxes) and just keep tax law simple and FLAT. You make this much, you pay this much no deductions.
Actually, the corporations are the ones who, through their lobbyists, craft those crazy tax laws.
That didn’t start happening until tax laws started getting out of hand.
Sometime back before most people here were born, most likely.
Before the income tax, most of government revenues came from tariffs, many of which were politically influenced. So, no, lobbyists predate the tax code.
If Australia wants to get more tax revenue then they need to legislate to remove the loopholes. Its that simple but the issue is that the politicians are scared to do that because they will lose funding for their re-election.
It is certainly the right of companies to legally reduce their tax burden if they can. Likewise, corporate tax is a method for countries to get companies to paid for the right to sell in their country.
Companies that make large profits clearly do not pass all the taxation onto the customer so the argument that the end-user will eventually pay for it does not pan out. Taxation needs to be set so that it encourages enterprise but still provides enough taxation revenue to maintain the services that the government needs to provide.
So to the politicians I say close the loopholes and stop whining.
Tax loopholes are imbedded in code for those in the know – the writers of the code – could take advantage of the loopholes.
As a nation you have two options, leave it be and let anyone who finds about about the loopholes, use them, if they can, or take them out of the code, such as a flat tax.
You don’t get to be king maker and say everyone be does X while my friends and I get to do Y. That is hypocracy.
Australia and Europe are trying to “Shame” companies in the court of public opinion, into paying up more taxes, than they otherwise would. They don’t want to change the rules, because they live by them.
The problem, public opinion goes like this: “Really? How can I do that too?”
Let’s not be xenophobic about this. Tim Cook appeared before the Senate to give evidence about how much Apple contributes in US taxes, over pretty much the same allegations in 2013..
I think what I said would apply to all governments. Keep in mind Australia is darling. Tax is one of those things, like interest rates, where it separates the haves from the have-nots. Rules seem to apply less to deeper pockets with more resources.
Tax avoidance. EVERYONE PRACTICES TAX AVOIDANCE. If I buy a house, it is done with TAX AVOIDANCE in mind. If I write off equipment purchased during the year, it is done with TAX AVOIDANCE in mind. Every write off and loophole are there specifically to provide the tax payer with TAX AVOIDANCE. If you don’t like it change your laws and enjoy the consequences.
This sick government mindset that your money actually BELONGS to them desperately needs to be curbed.
Corporate taxes are not paid by consumers – but by shareholders. Taxes are assessed on net profit. The consumer has already paid for his phone before the government takes its share.
If the Australian authorities don’t like they way Apple structures it’s company in Australia and how they pay their taxes then they should change the law. Don’t blame Apple or any other company for seeking to minimize their tax burden legally.
In other news, Apple has admitted to being in business to make a profit.
It’s not fair. Local businesses and national corporations can’t escape tax. Only multinationals pay nothing locally so can out-compete locals and nationals.