Apple pays just $36 million tax on $6 billion revenue

TECH-giant Apple reported an Australian tax liability of just $36 million in 2013, while also reporting Australian revenue of more than $6 billion.

Apple's tax liability is lower than in either of the two previous years, despite revenue increasing over the period.

Apple is just one of several US based multinationals - Google, Amazon and Starbucks are others - that have been criticised around the world for the low levels of local tax they pay in comparison to revenues and profits.

Many Australian consumers will be particularly irritated by Apple's results, given the substantial premiums they pay on Apple products and services compared to other markets.

The exact secrets behind Apple's ability to minimise its tax position are not known but are thought to hinge on a complex corporate structure that allows the company to shift profits into low tax jurisdictions including Ireland, the Netherlands and Bermuda.

There's no suggestion that Apple is doing anything illegal.  The current legal framework - both domestically and internationally - specifically permits this kind of tax arbitrage.  There's every sign however that both consumers and governments are growing increasingly concerned about this tax leakage.

The Organisation for Economic Cooperation and Development (OECD) is looking closely at the international rules with a view to stopping global profit shifting by multinationals.

At home, Taxpayers Australia's Head of Tax, Mark Chapman, pointed to the ever-increasing budget deficit and said: "Whilst hard-working Australians are being hit by increasing taxes and decreasing levels of public service, the ability of companies like Apple to treat our tax system as a minor irritant to be circumvented by a bit of clever planning needs to be urgently tackled."

"Whether at home or internationally through the OECD, the government needs to be fixing this as a priority," Chapman said. "The average small business doesn't have the option of setting up a holding company in Ireland and siphoning all its profits over there, so why should companies like Apple be able to get away with this?"

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