LAbour Party revenue spokesman David Clark is calling on
the Government to investigate tax options for multinational
technology companies operating in New Zealand after Apple
released its New Zealand profit figures yesterday.
Apple Sales New Zealand, the local unit of the iPhone, iPad
and iPod maker, almost doubled its annual profit on largely
flat sales, while extracting a dividend that eclipsed
Reported profit jumped to $10.5 million in the 12 months
ended September 28, from $5.5 million a year earlier, while
sales slipped 1.5% to $565.6 million, according to the
company's financial statements lodged with the Companies
The local unit of one of the world's most recognisable
companies paid income tax of $3.9 million in the year, up
from $2.5 million in 2012. Apple is one of a number of
high-profile multinational companies criticised for
minimising tax by routing profits through offshore
Dr Clark said in an interview the Government was ''sitting on
its hands'' when it came to tax issues.
Finance Minister Bill English was asked in a select committee
last week why the Government was taking little action on tax
issues, he said.
''He said there were few credible options for taxing
multinationals and New Zealand did not want to get ahead of
the market. Nothing has really changed in the past year,
despite the Government's toughening rhetoric.''
The Organisation for Economic Development was discussing
measures to clamp down on such arrangements, and Revenue
Minister Todd McClay said New Zealand tax department
officials would be participating in the Paris-based talks
Dr Clark said New Zealand had more at stake than many other
countries because it saw its future in technology. New
Zealand was competitive and had a market advantage - provided
tax laws were supportive of local industry.
New Zealand technology businesses ended up paying a
''significant portion'' of their income to support
infrastructure, such as schools, to help provide the next
generation of technology workers, Dr Clark said.
''Multinationals come in over the top, pay little tax and
take the profits from hard-working New Zealanders.''
Dr Clark advocated investigating the possibility of taxing
multinationals' revenue. But he said Apple was not as bad as
either Facebook or Google at avoiding tax in New Zealand.
Apple NZ's accounts showed the local unit was flush with cash
during the year, with cash and equivalents rising to $26.5
million as at September 28 from $4.3 million a year earlier.
The company paid a $14.8 million dividend in March last year,
its first since the 2010 financial year, when it returned $33
million to its parent.
The bulk of Apple NZ's revenue went to related parties in the
global group. It spent $531.5 million buying inventory from
related parties, down from $539.2 million in 2012. Its total
cost of sales was $541.4 million, leaving it with a gross
margin of 4.1% in the 2013 year, slightly wider than the 3.4%
achieved a year earlier.
Apple NZ sold $552.8 million of goods in the 2013 year, down
from $561.3 million a year earlier, while service fee income
rose to $11.9 million from $9.7 million.
- Additional reporting BusinessDesk