
Apple Paid $0 in Taxes to New Zealand, Despite Sales of $4.2B - e15ctr0n
http://www.nzherald.co.nz/technology/news/article.cfm?c_id=5&objectid=11820984
======
bdash
The Reddit comment at
[https://www.reddit.com/r/technology/comments/60ffl6/apple_pa...](https://www.reddit.com/r/technology/comments/60ffl6/apple_paid_0_in_taxes_to_new_zealand_despite/df68ydv/)
mentions the following:

> That 0$ is their NZ income tax. Obviously they pay all other taxes for their
> properties and employees. It is just that New Zealand and Australia have an
> income tax deal

>> Apple's New Zealand operations are wholly owned by an Australian parent and
appear to be run from there. A tax treaty between the two countries sees dual
claims on income tax default to where the company is controlled.

>> Russell, recently selected as the Labour Party candidate for the safe New
Lynn electorate for September's general election, said Apple's tax
arrangements were totally consistent with the law.

> So Apples NZ income tax is paid to Australia. All other NZ taxes are paid to
> NZ. Hilariously the tax rate in Australia is higher than in NZ

>> The accounts for Apple's New Zealand subsidiary disclose in notes that
income tax is paid at 30% - the rate in Australia - not the 28% charged in New
Zealand. This reference has been in every financial statement filed by Apple
with the Companies Office since at least 2007.

It provides [1] as its source.

[1]:
[http://www.documentcloud.org/documents/3515916-Apple-2016.ht...](http://www.documentcloud.org/documents/3515916-Apple-2016.html#document/p28/a344375)

~~~
acdha
The first point is completely irrelevant. Beyond that, it doesn't really seem
to matter – is anyone claiming that this is illegal versus a sign that the NZ
legal system needs to change?

~~~
wwalser
The point that a company paid taxes, in response to an article with a title
claiming that they paid $0 in taxes, is irrelevant?

~~~
acdha
The article was talking about corporate income taxes. The fact that they also
paid property taxes doesn't add much to the conversation, and that's even more
the case about whether their employees happened to pay personal income taxes.

~~~
Dylan16807
Going through the list of taxes and pointing out that they paid every single
one of them with no discounts, but one got weirdly routed, is relevant.

------
Lazare
NZ and Australia have a tax treaty so companies pay taxes where they're based.
Apple's Aus/NZ operations are based on Australia, so they pay the (higher)
Australia rate to the Aus government, instead of the (lower) NZ rate to the NZ
government on their NZ profits.

Meanwhile, companies based in NZ are paying no taxes in Australia. WHEN WILL
THIS MADNESS END?

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al452
$4.2 billion in sales, subject to 15% GST, suggests $630 million in tax
revenue to the NZ government. Not a bad tax take from an operation that runs
out of another country.

~~~
mustntmumble
Apple doesn't pay the GST on the sales, that is paid for by the consumers.
(Yes I know that is a gross simplification but that is the general idea of GST
- it is a consumption tax).

~~~
omarforgotpwd
Whether the consumer pays the tax on top of the retail price, or the producer
raises their prices and pays the tax out of their end, it is all the same.

~~~
throwaway2048
taxes companies pay come out of profits, they may choose to raise prices to
increase profits, or due to competition etc, they may not.

Its a vast oversimplification to say that all corporate taxes are just paid by
the customers anyways.

~~~
omarforgotpwd
I agree that it is an oversimplification to say the effects are exactly the
same, but my point was just that the price will go up and the consumer will
pay more regardless of where the tax is levied.

~~~
throwaway2048
consider that if they could have charged that much to begin with, they would
have.

------
hunta2097
The article quotes as follows:

"There are so many areas where Apple does enormous good - far, far more good
than any other electronics giant"

Any idea what is being referred to there?

I've never noticed Apple being particularly "good"?

~~~
IncRnd
That's just a meaningless introductory statement.

~~~
shrewduser
far far more meaningless than any other introductory statement

------
donatj
What taxes are purportedly owed? Do they have a physical presence in New
Zealand?

~~~
xupybd
They sell goods and services to people with a physical presence in New
Zealand. New Zealand supplies the infrastructure to make these sales possible.
So why should it even matter?

~~~
ucaetano
Because we're talking about corporate profit taxes, not sales taxes. They
already pay sales taxes in NZ (or collect from customers).

>> Apple's New Zealand operations are wholly owned by an Australian parent and
appear to be run from there. A tax treaty between the two countries sees dual
claims on income tax default to where the company is controlled.

------
Steeeve
Let's not forget about sales tax. $4.2B amounted to $630M in taxes. Plus the
import tax, which would be another $630M dollars.

And then take into account that they have stores and employees and have to pay
taxes accordingly. And then there's the investment poured in to generate those
entities.

Pretty soon, it looks pretty reasonable that the goverment allows things like
this to be structured because otherwise, taxes would be a deterrent for
companies looking to enter the market.

~~~
sitharus
Import tax? There should only be GST on most Apple products.

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drpgq
An argument for higher sales taxes versus corporate taxes?

~~~
tonyedgecombe
I wonder if the writing is on the wall for corporation tax, whether
competition between nations will drive it down to zero.

~~~
virmundi
It really should be zero or at least no higher than 20%. You're double taxing
corps. You tax the consumer's paycheck, then tax the corp when it sells.

~~~
tonyedgecombe
I don't think you are, employees salaries reduce profits and hence corporation
tax.

------
jaimex2
Our governments here in Australia/NZ are convinced huge tax breaks are the
only way to keep businesses here and generating jobs. I really don't know if
there is a better way but they are certainly scarred of more things moving
overseas.

------
twfarland
Where's the explanation of how this was achieved?

~~~
ucaetano
>> Apple's New Zealand operations are wholly owned by an Australian parent and
appear to be run from there. A tax treaty between the two countries sees dual
claims on income tax default to where the company is controlled.

Nothing to see here, move along.

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nkkollaw
From a company that prides itself to be ethical (see the accessibility stuff
and their ads), this is not cool.

On the other hand, if it's legal why would they not do it.

~~~
tedunangst
If one's legal tax bill is $0, how does one calculate one's ethical tax bill?
Which form does one fill out to remit ethical taxes?

~~~
al452
As far as I have been able to tell from the behaviour of those who believe
this kind of thing, the correct authority to consult to determine ethical tax
liability is the sub-editor in charge of writing headlines for whichever
newspaper one reads.

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jjtheblunt
Is this because the NZ tax system collects from the consumer rather than
merchant?

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skdotdan
What about V.A.T.?

~~~
sitharus
GST was paid for all physical goods shipped, and recently it's been added to
digital goods. Apple doesn't pay that though, the consumer does.

~~~
gech
Why should individuals pay the tax? This suppresses demand

~~~
LinearEntropy
In New Zealand, GST (15%) is paid by consumers on all purchases, from
groceries to phone sales.

