RaduTyrsina
News Team
According to the Australian Financial Review publication, Apple has moved almost $9 billion in untaxed profits to Ireland from its Australian operations in the past 10 years. The publication has allegedly obtained 10 years worth of financial accounts for Apple Sales International, which is said to be a secretive Irish company which is at the heart of Apple’s international tax arrangements.
AFR also observes that Apple reported pretax earnings in Australia of only $88.5 million for 2013. However, the Cupertino Company had sent an estimated $2 billion of income from its Australian sales to Ireland via Singapore before that. University of Sydney senior lecturer of taxation law Antony Ting, who has been thoroughly analyzing Apple’s tax arrangements for the past years, said the following:
Newspapers have had lots of stories about tax avoidance by Microsoft and Google and Apple, but there are hardly any numbers. Now, for the first time, there are numbers for the profits that escaped from Australian tax
The same report found out that Apple Sales International company has reported a staggering amount of more than $US100 billion of profits in the last five years. Last month’s Group of 20 finance ministers met in Sydney and they have decided that the world’s top economies need to start automatically exchanging information on tax matters from 2015. High-profile US tax commentator Lee *Sheppard told the Financial Review the following:
What is truly surprising in the Apple case is its brazenness. We’re not easily shocked by *transfer pricing practices that the US government accepts, for better or worse. We’re talking gross worldwide revenues the size of the California state budget, and no tax being paid anywhere on a huge chunk of profits.
AFR also explains how the Apple Sales International company works and how Apple transfers money to it in order to avoid taxes.:
Apple Sales International extracts the bulk of Apple’s huge profits on sales outside the United States, which it claims as payments for intellectual property and intangibles. But the Irish-domiciled company has never filed its financial returns with the Companies Registrations Office in Dublin. It initially filed accounts for its parent company, Apple Operations International, which receives funds only from dividend payments and gives limited visibility into how Apple shifts profits. Since 2003 Apple Sales International has filed no financial reports at all in Ireland. When the US Permanent Subcommittee of Investigation tabled excerpts of Apple Sales International documents, Apple insisted that virtually all figures be redacted.
One man that could be responsible of this intricate tax strategy is Peter Oppenheimer, who has resigned after serving as Apple’s CFO for the past ten years. However, it’s unlikely that any changes will take place with Apple’s tax strategy after the naming of the new CFO. All in all, what Apple did is perfectly legal, but is it fair? What’s your take on this?
Source: iPhoneForums