Apple's New Zealand sales slump as taxes still head offshore

Apple Inc's New Zealand subsidiay sold more than $1 billion of products and services - mostly its flagship iPhones pictures above - over the past year, but its sales are trending down.

Silicon Valley behemoth Apple’s sales in New Zealand, while still totalling more than $1 billion a year, have declined over the past 12 months.

Financial statements for the year to June 2024 for its local subsidiary, Apple Sales New Zealand (ASNZ), were recently filed to the Companies Office, showing revenue for the year declined by 6%, from $1.212b to $1.143b.

Its long-standing tax arrangement, whereby ASNZ pays tax across the Tasman to the Australian Taxation Office ATO) instead of Inland Revenue, continues, with $15.3 million paid on profits of $38.1m. The higher-than-usual rate of taxation was mostly down to a $4.2m charge after under-provisioning the amount due in previous years.

The arrangements with the ATO, first uncovered by the New Zealand Herald in 2017, means ASNZ has not paid corporate tax in New Zealand for at least the past decade, during which it has become one of the country’s largest smartphone suppliers.

Alex Waldron, a spokesman for Apple, told the Herald: “Apple pays tax in every country we do business, including New Zealand.”

The slim local profits on billion-plus revenues were largely down to purchases of $1.031b – presumably mostly iPhones by the tens of thousands – from ASNZ parent, the Australian-registered Apply Pty. Apple Pty is in turn directly owned by Apple Inc, whose market cap of $6 trillion makes it the second-largest listed company in the world, behind only chipmaker Nvidia.

Apple and Nvidia are one of a handful of companies – also including Microsoft, and Facebook and Google parents Meta and Alphabet – pinning future growth on, and billions of investments into developing, the emerging technology of artificial intelligence (AI).

Apple is releasing quarterly earnings tomorrow and is expected to post its biggest revenue jump in years as it gains market share in China.