A report by Fairfax media yesterday has been picked up by overseas outlets. The story revealed how Apple has successfully managed to avoid paying tax on estimated profits of $8.9 billion, by shifting the money to its tax haven in Ireland.
An investigation by Fairfax’s Neil Chenoweth in The Australian Financial Review discovered that last year Apple declared pretax earnings of just $88.5 million, while sending around $2 billion of its income to Ireland via Singapore.
Apple reportedly negotiated a secret tax deal in Ireland in 2009, alleges the newspaper.
The Review quoted Antony Ting, a senior lecturer in taxation law from the University of Sydney, who said, “Newspapers have had lots of stories about tax avoidance by Microsoft and Google and Apple, but there are hardly any numbers.” Ting himself has published a review of Apple’s tax arrangements.
Throughout the day, Fairfax published reactions and updates to the story, reporting mid-morning that the Federal Government was working to stop global companies avoiding paying tax in the country of operations.
Trade Minister Andrew Robb told ABC Radio, “We are very strongly committed to seeking to capture that tax, which has been avoided inappropriately,” adding that at the 22 and 23 February G20 meeting of finance ministers in Sydney, Treasurer Joe Hockey had claimed his government was “determined to tackle businesses artificially generating profits to chase tax opportunities”, wrote Fairfax’s Gareth Hutchens.
However, the Opposition, through shadow treasurer Chris Bowen, said the Government was actually unwinding its efforts to tackle the problem. Bowen claimed the [Tony] Abbott Government had stalled when it came to implementing the measures put in place by the previous Labor Government, that were drafted to tighten up Section 25-90 of the Tax Assessment Act.
“We had initiatives in Government which Mr Hockey has unwound to deal with this,” said Bowen. “He’s reversed it for the cost of $700 million and that is a very backward step.”
The story is clearly now being followed around the globe, with MacTech noting, “Apple Sales International, the Irish-based entity in charge of Apple’s international tax dealings, has never filed financial returns with the Companies Registrations Office in Dublin. However, the company reported over US$100 billion in profit over the last five years while paying less than 50 cents in tax on every US$1000 of income.”