The Australian Taxation Office is likely Next to Clamp Down on Apple's known 'Double Irish' Tax Strategy
Apple notes that they're currently under an extensive audit by the Australian Taxation Office (ATO). Apple is quotes as stating that "The Australian Taxation Office is currently auditing the company's tax position for 2012. As at the date of this report, the outcome of the tax audit cannot be predicted with certainty and reliably estimated, no adjustments have been recognised in the financial statements."
Australia's Sydney Morning Herald is reporting today that "Treasurer Scott Morrison told Fairfax Media that the government was committed to "shutting down tax avoidance strategies used by multinationals, such as large IT companies, who have exploited gaps and mismatches in the international tax system."
More specifically, the report points to Apple's elaborate "Double Irish" strategy which we covered in several recent reports and one with a video explaining this strategy (as noted below) that is angering several countries around the world. Australia is simply the most recent.
In a bid to stop multinational tax avoidance, the federal government last year passed legislation that boosts the ATO's anti-avoidance powers.
While Apple has stated that "Apple Australia pays all taxes it owes in accordance with Australian law," as it says in all countries now investigating their tax practices, the "political crap," as Apple's CEO has framed it, is catching up to them. In December Apple agreed to pay Italy $348 million over a tax audit. Last week Apple's CEO met with the EU's antitrust chief on the tax investigation and Apple fans in the UK are torn over the issue as well.
While world governments are seeing Apple's Double Irish tactic as a definite tax avoidance scheme that must be stopped, Apple's CEO simply thinks that this is all just political crap. In the end, however, most will agree that while Apple has played by the letter of the law thus far, its sophisticated tax avoidance strategy is considered a straight forward deceptive tactic by most governments in Europe and beyond. In the end, the '60 Minutes' rant by Apple's CEO Tim Cook is now seen as a poorly devised PR move that is backfiring on them. Hopefully Apple will get this issue behind them later this year.