Apple has not paid any income tax in New Zealand for the last 10 years due to an unusual treaty with Australia, despite having made billions from selling iPhones, iPads and Macs in the country.
The revelations come from the Weekend Herald, which examined annual financial statements filed with the New Zealand Companies Office as well as 10-K forms filed with the US Securities and Exchange Commission.
The statements reveal Apple has not been paying any income tax within New Zealand because its operations in the country are wholly owned by an Australian parent company. According to a tax treaty between the two countries, if there are dual income tax claims, then the tax claim defaults to the location where the company is controlled from.
What Apple is doing is completely legal – it has been paying income tax at the Australian rate of 30%, rather than the New Zealand rate of 28% – however the tax itself has been being sent to the Australian Taxation Office since at least 2007.
NZ$37m in taxes have gone to Australia for the last decade
The financial statements showed that Apple Sales New Zealand made NZ$4.2bn ($3bn, £2.4bn) over the last 10 years, and that it has paid NZ$37m in taxes for the period – but none of that money has been seen by New Zealand, even though Apple employs several dozen workers.
The issue is now making waves in the country as opposition politicians express displeasure and call for greater transparency over how multinational corporations manage their taxes.
All eyes are now on New Zealand's Revenue Minister Judith Collins, who proposed reforms on 3 March to try to stamp out tax avoidance by multinationals. However, she has said that she cannot comment on individual cases.
In any case, the reforms will aim to ensure that all multinationals with a large internet footprint are taxable on any profits made from selling any kind of goods or services in New Zealand if they employ people within the country, and submissions on the consultation document are open until early April.
The measures would also prevent companies from using interest payments to shift profits offshore, but will not go as far as the diverted profits tax introduced by the UK and Australia.
New Zealand's Labour revenue spokesperson Michael Wood said that citizens have "every reason to feel outraged" by the news.
"Nurses, cleaners, office workers, and small business owners, who pay their fair share of tax to support public services in our country, will be dismayed at these latest revelations," he said.
"We know that this is the tip of the iceberg for big multinationals being let off the hook by the National Government being completely asleep at the wheel."