New Zealand Joins Europe Countries Against Apple Tax Arrears
New Zealand is the newest member in the international criticism of Apple’s tax minimization arrangement.
Taxes in arrears
Apple has not paid any income tax in New Zealand for about ten years yet it has continued to pay $39 million in the Australian Taxation Office. Reports indicate the Apple has earned $NZ4.2 billion from 2017, yet the company has paid no income taxes to the country’s Inland Revenue office. The total tax payable to New Zealand government by the tech company is over the decade is over $350 million.
Apple did not address the issues directly, however, it stated that it “aims to be a force for good”. The company defended itself claiming that it pays most of its taxes in the USA as most of its products and services are designed, engineered and created in the U.S. This has prevented it from criticisms in Washington.
Apple in hot water in Europe
Last year, Apple was in big trouble in Europe due to its relationship with Irish government. The Irish government had granted the giant tech company special tax incentives. The European Commission ruled Ireland had provided the incentive as an illegal state aid. Apple was ordered to pay $19 million in back dated taxes.
Tech companies under scrutiny over tax issues
Tech companies including Apple, Microsoft and Google have undergone scrutiny recently over their offshore revenue arrangements. In Australia, keen attention drawn from the tax office and an audit, resulted to Apple’s local branch copping a 97% adjustment in the net profits in the year of income ending September 24, 2016. the adjustments went to previous year tax adjustments.
Companies waiting fro tax amnesty promise to be fulfilled
Companies in the U.S., among them Apple are waiting for the President Donald Trump to actualize his campaign promise and authorize an amnesty that will allow them to repatriate cash without paying tax. The companies are usually taxed locally and as well as on foreign earnings.
Trump suggested amnesty in order to encourage companies to bring more cash home and invest locally. Due to the taxing system in U.S. on profits earned abroad, Europe countries found it difficult to tax international companies.