Apple Brand Rotten at the Core?

Apple Tax

Tax to Apple is clearly a dirty word

Do large corporates such as Apple have a moral responsibility to pay their fair share of taxation? The Financial Review has in recent days finally been able to put some order of magnitude around just how little tax Apple is paying in Australia and the rest of the world.

Apple has shifted an estimated $8.9 billion in untaxed profits from its Australian operations to a tax haven structure in Ireland in the last decade. Last year Apple reported pretax earnings in Australia of only $88.5 million after it sent an estimated $2 billion of income from its Australian sales to Ireland via Singapore. It does all this through company Apple Sales International, which appears an amazingly simple vehicle for shuffling $’s earned outside the US into a big black hole that no particular country seems to shine a light on. Apple Sales International gets hold of the cash by charging a premium for Apple’s intellectual property. Simple. Apple depends on the ignorance of a host of countries seemingly locked into the old world.

Sadly, it appears not to break any particular law, it simply deliberately falls between the ever widening cracks of international tax jurisdictions. However, it is morally disturbing and greatly insulting. Apple Sales International reported more than $US100 billion ($112 billion) of profits in the last five years. Its accounts show it has paid less than 50 cents in tax on every $1000 of that income. That is not 50 cents in the dollar, that is 50 cents in a $1,000.  And for our tax coffers Apple Australia paid just 0.7 per cent of its turnover as tax. By comparison Australian companies are taxed nominally at 30 per cent and they pay on average 27 per cent.

In a time when we are hearing that the Government cannot afford to fund necessary infrastructure and social services, every dollar in tax lost or gained is critical. When we all have to pay our fair share of taxes to fund necessary public amenities, should we not be demanding a little more respect from Apple.

Sadly, most Australian consumers will simply cop it on the chin, keep buying Apple products and keep paying taxes. There is some sense that if consumers believe their decision to stop buying or using Apple will actually have an impact on Apple’s bottom line, they are more likely to boycott the brand. Unfortunately, however, consumers often think that their individual efforts will not have significant impact on the brand. More importantly, when consumers really like a brand they are less likely to boycott it, as they believe the opportunity cost too much.

Personally I find the whole scenario very challenging. I think Apple should be shamed into paying tax, but the shame of it all is I will probably keep buying their products.

What about you?

Peter Singline
Brand Scientist


  1. Companies that trade in a country should pay taxes in that country. The UK has similar issues (although I suspect more insidious and far wider-reaching given our reliance as an economy on banking and financial services) and governments are complicit in the problem, so you have more than one choice – you can use your franchise and elect polico’s whose policies you support, and that can enact laws that close the loopholes corporations exploit.
    Adbusters has championed ideas about consumer power, perhaps as designers (and planners, thinkers, activists) we should do more to take agendas for greater equality (as we have with environmental issues) in all aspects of the body-corporate. Designing for and championing the ethical dimensions of a product / service / brand shouldn’t finish with considerations around packaging, sourcing and sustainability. Fair trade should be something that applies to the first, second and third world.

  2. Add Google, Microsoft, Amazon, Ebay, Intel, Facebook, Twitter, Adobe and more to that list of shame. It’ll be a who’s who of silicon valley.

    I know the Irish government we very happy to have large American companies shuffling money through once they set up local operations, it was what started the celtic tiger. The Irish government was happy to create the jobs and collect the tax on income and other benefits that roiled from these organisations and still are. It’s not just the companies that are playing the tax game.

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