Apple NZ reports lower FY profit, defers taxes

Wednesday 1st March 2017

Apple Sales New Zealand, the local unit of the iPhone and iPad maker, reported a lower annual profit on a higher cost of sales, despite spending less buying inventory from related companies.

Profit was $6.5 million for the year ended Sept. 24, 2016 versus $17.8 million a year earlier, according to financial statements lodged with the Companies Office. Revenue rose 1.6 percent to $744 million. Of that, sales of goods rose to $732 million from $721 million the prior year while service fee income rose to $12.4 million from $11.5 million in the prior period.

The New Zealand division's cost of sales rose 3.9 percent to $729.2 million, in a year when purchases of stock from related parties fell 6.1 percent to $675.7 million.

Apple Sales New Zealand said it paid a total dividend of $28.4 million to its parent on June 16. There were no dividends declared in the prior financial year.

The local unit of the world’s biggest company by market value faced a $3 million tax expense versus $8.9 million in the prior year. The accounts indicate that the initial tax expense was $9.3 million but there were $6.2 million in deferred taxes.

Notes to the accounts say there are certain transactions and computations for which the ultimate tax determination is subject to the agreement by the relevant tax authority and the company recognises liabilities for such transactions based on estimates of whether additional taxes will be due. The carrying amount of its tax payables and deferred tax assets as at Sept. 24, 2016 were $9.3 million and $16.8 million respectively.

Apple is one of a number of high-profile multinational companies which have been criticised for minimising tax by routeing profits through offshore subsidiaries.

Apple NZ's cashflow statement shows it paid $10 million in income taxes in the 2016 financial year, up from $6.4 million a year earlier.

BusinessDesk.co.nz

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