Apple has shifted roughly $8.9 billion in untaxed profits from its Australian operations to a tax haven structure in Ireland over the last decade, reports The Australian Financial Review. In its investigation, it was found that Apple reported pretax earnings in Australia of only $88.5 million after it “sent an estimated $2 billion of income from its Australian sales to Ireland via Singapore, where Apple negotiated a secret tax deal in 2009”.
Using 10 years of financial accounts from Apple Sales International, the Irish company at the heart of Apple’s tax arrangements, the Financial Review says that although Apple Sales International has reported more than $100 billion in profits during the last five years, tax paid represents less than 50 cents on every $1000 of income.
Apple and other large companies have come under fire for their tax avoidance practices but there is no suggestion by the Financial Review that the current arrangement is anything but proper within Australian tax laws.
The full report is certainly worth a read and highlights the ways in which large corporations can shift profits to different tax residencies and avoid paying huge amounts of tax. While specific to Apple and Australia, the tax minimization practices are no doubt applicable to most of Apple’s foreign operations and those of many other companies too.
Source: The Australian Financial Review