Apple sells products worth $4.2 billion in New Zealand, faces backlash for diverting taxes

For the past few years, Apple has been involved in numerous cases in which it was accused of trying to evade taxes. It was fined heavily for avoiding taxes in China, and had to pay $318 million in a similar case in Italy. In fact, self-proclaimed 'fanboi' and British performer Stephen Fry criticized Apple heavily for the company's tax dodging as well.

Now, the Cupertino giant has come under fire for diverting taxes in New Zealand.

Local news publication New Zealand Herald reports that Apple sold products worth $4.2 billion NZD in the country, but failed to pay any taxes at all. It is important to note that since the operation in New Zealand is run from Australia, the company paid $37 million in income taxes to the Australian government instead. The report claims that this arrangement regarding taxes has been agreed on since at least 2007.

It is worth considering that Apple is not legally obligated to pay any taxes to the authorities in New Zealand, and that many other local exporters exercise the same practice as well. However, the company has still come under fire from some political parties, as well as the public who have criticized it for not paying its share of taxes. As the New Zealand Herald estimates, had Apple reported the "same healthy profit margin in New Zealand as it did for its operations globally", it would have been liable to pay a sizeable $356 million NZD.

An Apple representative responded to the backlash, saying that:

Apple aims to be a force for good, and we're proud of the contributions we've made in New Zealand over the past decade, because our products and services are created, designed, and engineered in the US, that's where the vast majority of our tax is paid.

While the public and political parties in New Zealand are furious over the fact that Apple has paid absolutely no tax in the country, the company has not yet been legally approached to revise the arrangement.

Source: The New Zealand Herald via Ars Technica | Original gavel image via Brian Turner / Flickr

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