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Apple Is About To Get Slapped Over Its Australian Tax Bill [Updated]

Last year in Australia, Apple took $6 billion worth of revenue. That should be great news for all involved, because Apple ought to be paying a whole mess of tax on that, too. Not so. Apple only paid $40 million in taxes. That’s less than one per cent. Federal MP for Chifley and the IT industry’s caped crusader, Ed Husic, is set to raise this issue in the House today, and as we understand, it’s not going to be pretty.

Husic raised the issue in the chamber today with a speech that is scathing of not just Apple, but also of other tech giants dodging their massive tax bills — read: Google.

To get these businesses to foot their bills, Husic is spearheading an effort to amend international tax agreements.

Husic pointed out that Apple Australia’s creative accounting left him and others scratching their heads. After generating $6 billion in revenue in 2011-12, Apple Australia notched up $5.5 billion in local costs, vexing the MP:

How? They do not manufacture here. They have no factories here. I do not know what their R&D effort is here—I do not know if they are claiming that this is driving their costs up. They have got a growing number of retail outlets, which I am happy about—they are creating jobs locally; that is great—but surely those outlets do not cost $5.5 billion to maintain.

They have a head office here, but you would not know it because they maintain a cloak of invisibility and their key management team dodge any scrutiny and refuse to even engage on public policy issues. Given the lack of work they do on that front, you would hardly say that it cost $5.5 billion to maintain a head office here and dodge that limelight.
According to Mark Zirnsak of the Tax Justice Network Australia, ‘it seems somewhat incredible that they have $5.5 billion in costs’. I imagine that their costs are probably tied to transfer pricing arrangements, which again is the subject of an element of the amendment bill that we are debating now. I imagine that the costs are tied to that transfer pricing arrangement between Apple’s Australian operations and their US parent.

Husic said that he had been a fan of Apple, but after the gadget giant’s continual dodging of governmental intervention, his enthusiasm has dimmed.

Google also copped a shellacking from Husic, but added that they were at least willing to communicate with the government.

Read the full speech here (PDF).


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