Apple's Aussie tax bill swells after profits triple

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Apple's Aussie tax bill swells after profits triple

Pre-tax earnings jump 184 percent.

Apple's Australian tax bill more than doubled last year after 12 months of strong profits but flat revenue.

The local operation, Apple Pty Ltd, paid out $80.3 million in income tax in its last financial year, an increase of $43.9 million (121 percent) over the $36.4 million it coughed up in the previous year, according to its annual report to the Australian Securities and Investments Commission (ASIC).

The tax hike came courtesy of a major increase in pre-tax profit, which hit $251.9 million, a rise of $163.4 million (184.6 percent) from $88.5 million.

The fluctuating Aussie dollar was the big factor in the rise: Apple booked an unrealised foreign exchange gain of $106.4 million in the 2014 financial year, up significantly from a $46.9 million loss the previous year.

An Apple Australia spokesperson agreed that currency fluctuations had an effect on its results, and declined to comment further. 

Apple is one of a number of technology companies currently under scrutiny locally and internationally for its taxation practices.

"The majority of profit that should be taxed in Australia is shifted to Ireland. And that profit is not subject to tax in Ireland or anywhere in the world,"  University of Sydney taxation law lecturer Dy Antony Ting told CRN following Apple's 2013 annual report.

The Australian Tax Office last week revealed it has investigated 25 international technology companies over the past 18 months for tax avoidance as part of its ongoing crackdown on elaborate cross-border tax structures and profit shifting.

The ATO was given extra resources by the Government last year to embed auditors within the local offices of multinational companies in order to stamp out the use of legal loopholes that allow global enterprises such as Google and Apple to minimise the amount of tax they pay in Australia.

Treasurer Joe Hockey at the time said Australia was missing out on up to $3 billion as a result of these schemes. Corporate tax is the second-largest source of federal government revenue in Australia behind income tax.

Flat sales, strong profits

Apple's consolidated revenue flatlined over its fiscal year to 27 September 2014, down 0.5 percent to $6.07 billion.

While Apple released new smartphones, the iPhone 6 and iPhone 6 Plus, within the period, they only hit the Australian market on September 19, just days before the end of the financial year.

Globally, Apple shifted a record 10 million units of the latest-generation smartphones in their opening weekend.

Apple's Australian net profit reached $171.5 million in 2014, up $119.4 million (229.2 percent) from $52.1 million the year before.

Copyright © CRN Australia. All rights reserved.

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