Aussies fume as Apple nicks billions
The Australian press is incandescent with rage after it discovered that the fruit themed cargo cult Apple has worked out a way of avoiding giving billions to its taxman.
Apple is already in hot water for overcharging Australians for its shiny toys and now it seems that it is refusing to pay tax.
Part of the whole idea of a trickledown effect is that companies pay tax to fund things like welfare programmes. However, it turns out that Jobs’ Mob has worked out a perfectly fair dinkum way of avoiding paying most of the tax.
According to the Financial Review 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.
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.
Hacks at the Financial Review obtained a decade’s 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.
This is the first time that the financial details of the scale of Apple’s tax avoidance has been made public.
Apple Sales International has reported more than $100 billion of profits in the last five years. Its accounts show it has paid less than 50¢ in tax on every $1,000 of income.
Its contempt for paying tax was the focus of a bitchy report last May by the US Senate’s Committee on Homeland Security and Government Affairs, Permanent Subcommittee on Investigations. The report sent alarm bells given the amount of tax avoidance that the US authorities let through.
Apple is creating worldwide revenues the size of the California state budget, and not paying tax anywhere.
The architect of Apple’s tax strategy, chief financial officer Peter Oppenheimer, announced his retirement in the US on Tuesday but few expect Apple to do much different. After all it might be immoral but it is perfectly legal.
What is funny is how Jobs’ Mob has managed to be caught out. When the US Permanent Subcommittee of Investigation tabled excerpts of Apple Sales International documents, Apple insisted that virtually all figures be redacted. Apparently big corporates in the US can do that.
However, in Australia, Apple was caught by Section 601CK of Australia’s Corporations Law and it was required to file annual financial statements with the Australian Securities and Investments Commission from 2000 until 2009.
Apple’s iTax, has Apple Sales International and its parent, Apple Operations International, funnel all the case to Ireland where they pay no tax 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.
None of the profits which Apple moves to Ireland from Australia and elsewhere are taxable. The Irish government tried to close this ”double-non-taxation” loophole but all Apple has to do to get around this is choose a tax residence is which has no corporate tax, or Singapore and it still pays no tax.
What is clear from going through the figures is that Apple is operating a money laundering operation worthy of the Mafia, but all perfectly legal.
It seems that the only way anyone is going to get Apple to behave is by organising a boycott of its products.