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Apple Paid $0 In Taxes To New Zealand, Despite Sales of $4.2 Billion (nzherald.co.nz)
Apple paid no income tax to New Zealand's Inland Revenue Department for the last 10 years, according to an article shared by sit1963nz, prompting calls for the company to "do the right thing" even from some American-based Apple users. From the New Zealand Herald:
Bryan Chaffin of The Mac Observer, an Apple community blog site founded in 1998...wrote that Apple was the largest taxpayer in the United States, but 'pays next to nothing in most parts of the world... [L]ocal taxes matter. Roads matter. Schools matter. Housing authorities matter. Health care matters. Regulation enforcement matters. All of the things that support civil society matter. Apple's profits are made possible by that civil society, and the company should contribute its fair share.'"
Apple's accounts "show apparent income tax payments of $37 million," according to an earlier article, "but a close reading shows this sum was actually sent abroad to the Australian Tax Office, an arrangement that has been in place since at least 2007. 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."
"It is absolutely extraordinary that they are able to get away with paying zero tax in this country," said Green Party co-leader James Shaw. "I really like Apple products -- they're incredibly innovative -- but it looks like their tax department is even more innovative than their product designers."
Apple's accounts "show apparent income tax payments of $37 million," according to an earlier article, "but a close reading shows this sum was actually sent abroad to the Australian Tax Office, an arrangement that has been in place since at least 2007. 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."
"It is absolutely extraordinary that they are able to get away with paying zero tax in this country," said Green Party co-leader James Shaw. "I really like Apple products -- they're incredibly innovative -- but it looks like their tax department is even more innovative than their product designers."
It's not even that.
Apple Australia and Apple NZ deliberately run at no profit, because they are not meant to run a profit. There job is to get products in people hands and handle returns.
If they make money, Apple would just charge Apple NZ more money for products, until they make no money.
Apple (ireland?) buy all the products from apple china and sell them to Apple NZ at a profit.
Every government wants in on this.
The truth is, governments are prepping for a tax on revenue, essentially a value add / gst tax increase, but not called that.
The VAT tax rate on that $4.2 billion is 15%. New Zealand made a lot of money off those iphone sales.
"Apple almost certainly paid sales tax."
It seems that NZ GST, although collected by the seller, is considered to be paid by the consumer.
"National Security is the chief cause of national insecurity." - Celine's First Law
First off, in NZ it's called "GST" (Goods and Services Tax), which is similar to what the US calls "Sales Tax" and what other countries call "VAT".
Apple indeed would not pay any GST here because Apple is not the final retailer*. The final retailer would collect the GST from the sales of Apple goods and pay it directly to the IRD. Wholesale sales of the goods from Apple to the end retailer are GST exempt provided that they are sold to a GST registered business for the purpose of resale would would account for pretty much *all* of Apple's sales in NZ.
* As far as I'm aware there are no "Apple stores" in NZ, all of Apple's products are sold through other 3rd-party retailers here. Even if there were an Apple store it likely would not be directly owned by the same Apple NZ corporation that this article references.
Windows is a bonfire, Linux is the sun. Linux only looks smaller if you lack perspective.
I've lived in NZ for a number of years now and I used to read the NZ Herald, Stuff.co.nz and other publications in this group.
To say they are anti-Apple partisan is an understatement. It's just hateful bile, and industrial propaganda.
Any comments I posted under their articles were being either blocked or deleted if I said anything pro-Apple or contradicted their anti-Apple editorial.
Apple is a US company. Yes it sells into NZ and the NZ government collects the standard 15% on all Apple's sales.
I'm at a loss to understand why sales of $4.2B should be taxed for anything else but sales tax?
If NZ wants more money then they should look at imposing import tax on electronic goods.
Singling out a single company isn't right.
I hope people understand the consequences of demanding changes to taxes for corporations. I'm not defending the status-quo, but you have to understand how US taxes are out of step with the rest of the world.
US companies are taxed, no matter where their income is generated. US citizens are taxed no matter where their income is generated. Therefor US companies and US citizens are not competitive with foreign companies or foreign workers. The US only gets away with it's taxes because moving companies is impossible (eg burger king merging with tim hortons and thus becoming a canadian company) without a huge expense of buying and creating numbered companies that exist for a short period of time. US citizens are not mobile like EU citizens are.
So you have two options, either make trade with the rest of the world ridiculously expensive with tariffs, thus protecting the domestic workforce and domestic corporations from having to compete, OR you force your domestic workforce and corporations to compete. Trump is going to try the former through regressive policy.
What would fix things, or even the playing field is by literately getting rid of corporate taxes and push ALL taxation onto the workforce. Because rich people create shell corporations to hold their assets, they love this idea. But it's not good for people who can't do that. So the correct fix for this is to tax people based on where they own property. So unless you never want to "own" a home, you pay taxes everywhere.
Since US taxes are out of step with the rest of the world (the only country that requires you to pay taxes by virtue of being born a US Citizen) that has to change.
So basically, if you own a home, you pay worldwide income taxes to that country that home is owned in. If you have a home in two countries, then guess what, you pay taxes in both places. Minimize the tax burden by declaring "non-immigrant(alien) resident" and split the taxes between each country that you own a home in. You'd do this by indicating the address of every home owned, and dividing the taxes by all of them. So if you own 3 homes, 1 in Canada and 2 in the US, then you pay 1/3 of Canada's taxes to Canada, and 2/3rds to the US, and the IRS and CRA will simply verify that taxes have been paid in each others country. Problem solved.
To solve the corporate taxation problem, you make sure that "wealth holding companies", numbered companies, etc, play no corporate taxes to any government, but must pay out 90-100% of profits (eg like a REIT or Income Trust) or re-invest those funds (eg they can not be paid to anyone) if directed to do so. That way the tax payers are consistently paying taxes on capital gains, it's like having a personal bank that pays high interest.
Apparently you don't know how VAT works. Hint: corporations don't pay VAT, they merely collect it. Besides, only the last retailer in the chain collects VAT, it doesn't apply in B2B transactions.
It doesn't matter who pays the tax. It's the end user in all cases. Whether Apple sells it's phone $1000 and pays the govt $150 or sells its phone $850 and the user pays the govt $150 makes no difference other than semantically.
Write boring code, not shiny code!
I think that 4.2 billion dollar figure is over 10 years, which would make it $93.90 per capita. Much more reasonable figure then.
It doesn't matter who pays the tax. It's the end user in all cases. Whether Apple sells it's phone $1000 and pays the govt $150 or sells its phone $850 and the user pays the govt $150 makes no difference other than semantically.
You are talking about tax incidence. But you forgot about an important detail. Companies cannot always simply pass on any taxes. Just because the government assigns a particular tax rate to my company doesn't necessarily mean I can raise prices to compensate. The reasons for this vary but usually it is because of competitive pressures. So in many cases the company ends up eating some percentage of the cost and their profits are lower. It's unclear if this would apply in Apple's case but it is clear that Apple cannot simply charge any amount they want. At some point the price gets high enough that people will seek out alternatives which is why Android has huge market share despite modest profits. In the long run (years) all prices are variable but for shorter periods of time there often are constraints on pricing power.
But if a company can manage to (legally) dodge all taxes that can be a huge competitive advantage in pricing power. It allows them to sell a product for less money than would otherwise be possible, even if it is a premium product with a fat margin.