Apple reveals $84.9m paid in tax while reaping $8bn in revenue

Tax office target Apple Australia paid just $84.9m in tax despite reaping revenue of $7.86bn last year, accounts show.

Apple Australia’s Tony King gives evidence to the Senate inquiry into corporate tax avoidance.

Tax office target Apple Australia paid just $84.9 million in tax despite reaping revenue of $7.86 billion last year, accounts filed with the corporate regulator show.

The company, which is being audited by the ATO as part of a crackdown on multinational corporate tax evasion, was forced to pay an extra $11.6m in back taxes, the accounts reveal.

The accounts, covering the 12 months to September 26 last year, show revenue from sales of ­iPhones, computers and other gadgets in Australia soared 29.5 per cent — or about $1.8bn — but profit, the figure used to calculate tax, fell from $172m to $123m.

Apple has always insisted it pays the correct amount of tax but, in evidence to a Senate inquiry last April, Tax Commissioner Chris Jordan questioned whether it was moving profit to low-tax ­jurisdictions. He said the Apple audit aimed to probe sales of products to the Australian company by its offshore arms. By increasing the price it pays its affiliate in a low-tax jurisdiction, a company in Australia can reduce profit — and tax payable — here. “The ATO audit is con­testing whether these affiliate sales are at an appropriate price,” he said.

Apple is among tech giants including Google that have been under scrutiny around the world as authorities attempt to stop tax revenue leaking to havens such as Singapore and Luxembourg. Apple Australia managing ­director Tony King told the Senate inquiry that “Apple Australia pays all taxes it owes, in accordance with Australian law”.

The claim met scepticism from Mr Jordan. “To paint this picture, media reports have suggested Apple had an effective rate of 1.9 per cent on $US36bn in international earnings in 2012,” he told the inquiry.

Apple Australia did not pay a dividend to its shareholder, Irish company Apple Operations International, last year. It has been criticised for using Irish companies to shelter from tax, although it denies using an exotic and much-criticised structure known as a “double Irish with a Dutch sandwich”.

Apple Australia paid an $110m dividend to Apple Operations International in May 2014.

The accounts show an “adjustment relating to prior years” bumped Apple’s tax bill up by $11.6m. The company did not say which years were involved.

In a note, Apple also leaves the door open for additional tax bills, admitting that the tax on some transactions is “subject to agreement by the relevant tax authority” and the final outcome might be different from its estimates.

The accounts emerged as the British Revenue & Customs office settled a tax investigation with Google for £130m over 10 years, a tiny proportion of the company’s £3.93bn annual British revenues.