New Zealand puts the bite on Apple over taxes New Zealand has joined the international criticism of Apple's tax arrangements, with NZ$4.2 billion worth of sales over ten years yielding zero tax in the country. It did pay some tax in that period – a paltry $37 million – but that was remitted to the Australian Tax Office. The revelations made by the New Zealand Herald …
http://www.radionz.co.nz/programmes/first-person/story/201776580/first-person-with-john-campbell-apple's-high-ideals-and-low-tax-bill
If I recall correctly, John Campbell's investigation took him to Apple's only corporate presence in NZ, an effectively unmanned office. Little more than a PO box/mail-drop.
The idea that in 2014 $551m of $568m revenue was eaten up by "cost of sales" is specious and intelligence insulting nonsense.
"Even though American companies are taxed locally, current US law insists they also pay US taxes on foreign earnings."
Shouldn't that be: "Even though Apple is not taxed locally, current US law i̶n̶s̶i̶s̶t̶s̶ ̶t̶h̶e̶y̶ ̶a̶l̶s̶o̶ allows them to delay paying US taxes on foreign earnings."
If you are running a story on New Zealand, and decide that you really need sheep to illustrate Apple's tax affairs, please source a stock picture showing Romneys or Correidales. And they should be on hillsides rather than in a European farmer's lane.
Other than that, NZ has Goods and Service tax instead of sales taxes and, yes, it is a tax on consumers not on Apple.
For corporate tax, NZ has the same laws as most countries (but not the US) - companies pay tax where they are incorporated/resident. If Apple runs its NZ affairs through an Australian firm, it pays profit taxes in Australia. Likewise, when I sell consultng to a US client, my company pays taxes in NZ, not in the US.
Note also that companies in the end don't "pay" taxes; tax is paid by real persons. So some combination of the customer, staff, and shareholders actually pay.
So if NZ plans to extort $350 million from Apple, you can bet your bottom dollar that the actual tax will be paid by Apple consumers in NZ.
Like all tax grabs, it's just another way for governments to reach into your pockets and help themselves. However it sells to the simple minded, they think that Apple pays the tax, and they can't make the mental connections to think where Apple gets the money from to pay those amounts - yes, you're right, it is from them. So they happily support a new tax on themselves. No end to the self deception encouraged by greedy, self serving, venal, politicians.
The US has "breed" the best tax experts in the world. NZ is seeing what the US has been having done to them what the IUS has been doing to us for years. They find a loophole and stretch it to fit them. Ireland is another Tax dodge, for the US as are other countries.
The US must get their system under control. Only one option has been suggested and everybody across the board rejects it (flat tax). GE a multi billion dollar company pays either zero or a few thousand. They broadcast the fact that they have the lowest tax rate in the US.
All those MBA's must justify their salaries and this is one way. If you fire them in a few years some one else will take their place.
I don't have an answer but our tax code is so complicated that it breeds this type of abuse.
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