Apple's New Zealand business clocked a boomer year despite the pandemic - or possibly because of it, as punters turned to tech amid the remote-working boom.
Apple Sales NZ - fully-owned by Apple's Australian subsidiary, which is in turn fully-owned by its US parent - saw revenue for the year to September 26, 2020 jump 15 per cent from $838 million to $965m.
Before two adjustments relating to provisions for previous years (one $473,000, one $954,00) Apple Sales NZ reported "tax at the applicable rate" of $9.40m on profit before tax of $31.34m.
Tellingly, that equates to Australia's corporate tax rate of 30 per cent, indicating Apple Sales NZ's tax bill was ultimately paid to the Australia Tax Office (ATO) rather than the IRD in NZ, where the corporate rate is 28 per cent.
Earlier, a tax partner at one of the big accounting firms told the Herald that because Apple's NZ operation is fully owned by the Sydney-based Apple Pty, it falls under a tax treaty between Australia and New Zealand designed to avoid double taxation.
The setup meant the ATO can demand Apple pay tax on its transtasman operation in Australia, the partner said.
It was possible that Apple had paid a 28 per cent rate in New Zealand then a 2 per cent top-up to the ATO to reach the Australian corporate rate, or that the full 30 per cent had been paid across the Tasman.
No tax authority is named in the filing; IRD said it could not comment on an individual filing, citing confidentiality provisions of the Tax Administration Act. Unlike a number of other Big Tech companies, including Microsoft and Oracle, Apple Sales NZ's filing does not reference any IRD inquiry into alleged profit shifting. Apple, along with other tech companies, has been under scrutiny across the Tasman).
A spokesperson for Apple said, "Apple pays tax in every country we do business including New Zealand."
Apple's filing does break down product ($941m) vs services ($24.1m) but not products by category.
But, earlier, Gartner noted a broad market trend that saw Kiwis spending much less on smartphones during 2020 (total sales were down from 308,000 to 1000 units for the third-quarter) while sales of laptops surged amid the remote working boom.
Fears of product shortages proved unfounded as China made a rapid early recovery from Covid, while the broader economic slowdown was offset by the surge in home office sales.
Apple Sales NZ's main expense was related-party transactions with its corporate parents ($929m).
But it also saw cash and equivalents fell from $137.3m in 2019 to $87.0m as the local operation paid a much larger dividend to its Australian parent - $49.4m, from $19.5m in 2019.
Apple Australia, in turn, paid a A$512m dividend to its US parent, nearly double last year's A$267m.
The supersize dividend saw Apple Australia's cash decrease from the prior year's A$608m to A$78m.
Overnight, Apple Australia (whose financial year also ended on September 26 - another sign of the ATO being in the driving seat) reported revenue that rose 4 per cent to A$9.8b ($10.0b).
Apple Australia had pre-tax earnings of A$408m and paid A$199.9m tax (that is, a 30 per cent rate) for a net profit of A$288.4.m.
The respective filings confirm Apple is still running its Australasian operation primarily out of Sydney.
The company reported a salary and wage bill of $2m in NZ for an unspecified number of staff, and A$268m in Australia for 3896 employees.
Global blockbuster in the offing
Apple is due to deliver its global result on Wednesday, with analysts expecting it to report quarterly sales that top $US100b.
Only a handful of companies, including Walmart and Exxon Mobil have ever reported higher quarterly revenue.
But while Apple might set a record mid-week, it might not stand for long, with Amazon - whose e-tail and cloud computing divisions have boomed during Covid - expected to report September quarter revenue of between US$112b and US$120b.