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."

Comments

If it's legal...

[Frosty Piss]

People always complain about this sort of thing, but you know most individuals would use legal tax "loop-holes" to avoid paying taxes if they could (and many wealthy people come close). Apple and all the other zero-tax paying companies are not non-profits, they're in it for the money. If people are upset about all this, perhaps our elected representatives can change the laws? Seriously, if it's legal, what of it? Like I said, most people would do the same if they could...

Re:If it's legal...

[sed quid in infernos]

There is a certain category of acts that are wrong regardless of the legalities. There are others that are wrong because they are against the law. Legally enslaving people falls in the former category. Legally paying zero taxes falls in the latter category. Note that "legally" does a lot of work in that sentence. For example, it presumes accounting and reporting that complies with the law, that is honest, etc. But if Apple is following the law in NZ, they are not doing anything unethical.

Re:If it's legal...

[SharpFang]

So, if I'm a legal shareholder of Apple NZ, and year by year it produces a $0 profit, is it acting in my interest?

Apple NZ is a sockpuppet entity with sole purpose of its existence being shielding the parent company from taxes. Its main purpose is NOT generating profit. This is an abuse of the system where successful local entities pay taxes, but unsuccessful ones don't have to - creation of a fake shell that artificially inflates local costs to a point of zero revenue to redirect actual income to a tax paradise.

The law normally doesn't allow such sock-puppets. If person X is shareholder of both the sock-puppet and parent company, using the sockpuppet to dodge the tax, they are about universally considered a tax fraud, and persecuted. But building a sufficiently complex hidden network of money flow and ownership, it's possible to obscure the fact how person X factually owns the sock-puppet, while not being legally the owner - it's still exactly the same tax fraud, but much harder to prove.

sorry, no

[ooloorie]

Apple Paid $0 In Taxes To New Zealand, Despite Sales of $4.2 Billion

Apple almost certainly paid sales tax. In addition, people who bought Apple devices already paid income tax. Why should Apple, on top of all that, pay corporate tax in New Zealand, when mostly what they are doing is importing goods into New Zealand?

If you get upset about Apple not paying corporate tax in New Zealand, then perhaps Americans should start imposing corporate and income tax on New Zealand farmers whose Kiwis and sheep are shipped to the US. How about it?

This is the problem with corporate income tax.

[BitterOak]

This is a basic problem with corporate income tax: everyone in the world feels they are entitled to their "fair share". Corporate tax itself is a kind of double taxation: a corporation is made up of people who pay income tax. In addition, there is sales tax paid on all goods sold in a given country. I imagine a great deal of sales tax has been paid on Apple products in New Zealand, money the government wouldn't have if Apple didn't sell products there.

The problem with corporate income tax is that it is always possible for a mutlinational corporation to shift its profits to whichever country offers the lowest tax rate, unfairly enriching that one country. The best solution is probably to get rid of corporate income tax altogether, and make up the difference with sales taxes. (After all, the cost of corporate taxes are passed along to the consumers anyway.) This way, there's no arguing about who is entitled to the tax money: it's paid by the consumer wherever the sale takes place. This isn't the first time corporate taxes have caused problems: remember the court battle in which the E.U. argued that Apple owed more taxes to the Irish government, despite the fact that the Irish government didn't even want those revenues? This is the kind of absurdity that results from corporate taxes.

Re:This is the problem with corporate income tax.

[cas2000]

Corporate taxation is double-taxation because their employees and customers pay taxes. Really? Do you have any idea how fucking stupid this line of argument is?

it's no different to saying "i shouldn't pay tax because the shopkeepers i buy shit from will pay tax", who then say "no tax for me because my employees pay tax", who then claim tax-exemption by pointing back to the fact that the shops THEY buy shit from pay tax.

and sure, if you're a properly brainwashed American, you'll think you're "clever" by saying something like "Yeah, exactly! Tax is theft". but tax is how civilisation is paid for. It's why you're not a slave in some shit-poor stone-age (or bronze-age at best) economy. It's why you can read, it's why you can do at least basic arithmetic (and can hopefully count your change when you buy shit). It's why countless things that you take for granted in your life exist and are maintained.

Every fucking cent has passed through multiple hands and has been taxed multiple times as it cycles through the economy. Exempting corporations from paying tax because of that is just fucking cretinous.

The problem with corporate income tax is that it is always possible for a mutlinational corporation to shift its profits to whichever country offers the lowest tax rate, unfairly enriching that one country. The best solution is probably to get rid of corporate income tax altogether

yeah. just like the best solution to burglary is for everyone to put all their possessions on the front lawn to make it easier for thieves. fucking idiot!

This isn't the first time corporate taxes have caused problems: remember the court battle in which the E.U. argued that Apple owed more taxes to the Irish government, despite the fact that the Irish government didn't even want those revenues

That happened because Apple was using Ireland to evade paying taxes in the countries where they sold their products. Unsurprisingly, those countries were pissed off by that tax-evading loophole, so took court action to force Apple pay the same tax regardless of where they claimed to be making the profit, making the whole profit-shifting bullshit pointless. Or worse than pointless because the administrative overhead in creating and maintaining that bullshit also has a monetary cost.

Also, the government of Ireland had a responsibility to the **PEOPLE** of Ireland to collect that tax, regardless of how many kickbacks and bribes the MPs took not to collect it.

They do contribute

[psmoot]

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 (and every other company) does contribute. They product fabulous products at prices customers are very willing to pay. That means there's a substantial consumer surplus captured by Kiwis. That's Apple's contribution to New Zealand society.

(Side note. I don't remember where I read this so I can't cite it. A study showed that most of the value created by companies is captured by customers. Apple may be worth zillions but if you add up how much people would have been willing to pay for their products, it's something like 10 to 20 times higher.)

Remember also, Apple doesn't ultimately pay taxes. It just collects taxes and writes the check. Ultimately the burden of the tax falls on Apple's customers (through higher prices), employees (through lower wages), and investors (through lower profits). I'm guessing most of them don't live in New Zealand.

Careful what you wish for...

[Roger W Moore]

If people are upset about all this, perhaps our elected representatives can change the laws?

The problem with this is that these companies have an army of lawyers trying to find holes in whatever laws are passed. They can find these holes faster than laws can be patched because governments have to tread carefully to make sure new laws do not accidentally penalize companies who are behaving themselves. The only way I can see governments defeating this is by giving themselves far more discretionary taxation power to target individual companies than they currently have and that can lead to abuse of that power if we are not careful.

Re:VAT

[Cmdln Daco]

Declare any and all IP claims Apple could make null and void in New Zealand.

The contents of the Apple App Store could probably fit on a 4 terabyte hard drive that could be installed in every Public Library in New Zealand. I bet Tim Dotcom could help them set it up.

Curious why New Zealanders buy so much Apple stuff

[Solandri]

New Zealand has a population of 4.471 million. $4.2 billion / 4.471 million = $939 per capita spent on Apple products.

China has a population of 1.357 billion. Apple's annual revenue in China was $48.5 billion, or $36 per capita.

Europe has a population of 743 million. Apple's Europe revenue was $49.95 billion. Or $67 per capita.

Japan has a population of 127 million. Apple's Japan revenue was $16.92 billion. or $133 per capita.

The U.S. has a population of 319 million. Apple's revenue in the Americas was $86.62 billion. Even if you attribute 100% of that to the U.S., that only works out to $272 per capita.

So either New Zealanders absolutely love buying Apple products by nearly an order of magnitude more than the rest of the developed world, or the $4.2 billion figure is somehow exaggerated.

Re: That's their job

[dunkelfalke]

And yet most individuals pay more income tax than Apple.

Re:That's their job

[serviscope_minor]

Indeed. How many individuals "do the right thing" and pay extra taxes beyond what they are legally required to pay?

Many.

Over here (the UK) there's all sorts of weird shennanigans you can pull if you put in the effort by contacting via offshore companies, and every so often you hear about people in the news doing so. Such things are available to everyone in principle. Most people don't do that and simply take salary the normal way and pay taxes the normal way.

Most people don't "like" paying taxes and grumble about them except that we all like our smoothly operating first world country with a high standard of living. Combine the awkwardness of actually setting up such a scheme legally with the vague feeling of unease many people get due to not being psychopaths and realising that not paying their fair share is bad and the result is most people pay a reasonable amount of tax.

It is not Apple's fault that NZ has dumb tax laws.

See this is why we can't have nice things. It's very hard to set up laws that allow reasonable business things and can't be abused. Because of scum like Amazon, now every small company has to deal with the horror of VATMOSS. Your idea to fix the laws is great and all but it will hit every single company that legitimately licenses IP of various sorts from abroad in a perfectly normal, non tax dodging way.

The only fiduciary duty that company directors have is to not fuck up egregiously or with intent. You can check the case law if you like, but until you can provide a reference where someone actually won a lawsuit over breach of fiduciary duty for merely not maximizing profits, I won't accept such a duty exists. There's also duties in many countries about public good as well.

Someone, somewhere chose to dodge those taxes. Just because they were able to get away with it doesn't mean it wasn't their fault. Ultimately people are responsible for their actions.

Re:That's their job

[TheRaven64]

How many individuals "do the right thing" and pay extra taxes beyond what they are legally required to pay?

It depends on what you mean by 'legally required to pay'. The amount of tax that I pay is the amount that you get by taking my salary and multiplying the parts of it in different tax brackets by the tax rates. There are a huge number of tax avoidance schemes that I could use to reduce my tax burden, but I've received a lot of benefits from living in a functioning society with a working social safety net and I can quite easily afford the taxes, so I'd rather just pay them. I doing so, I am not in a minority, this is precisely what most other people in the UK do.

If this is your definition of paying more than you are 'legally required to pay', then most people do, but most large corporations don't.

Re:That's their job

[drinkypoo]

and pisses away of tax money in "foreign aid" at a time when there is a budgetary deficit in our own country.

Maybe you should look up the ROI on foreign aid sometime. It's money we spend to stop problems from developing into larger problems which would actually cost us more money. I bet you're one of these people who wants to keep out the refugees. Well, guess what foreign aid is for? Yeah, that's right. Creating less refugees.

If you want to talk about pissing away money, there is only one discussion to be had at this time: The F-35. Every other pissing away money story is just pissing into the wind.