Apples dollar 80.3 Million Australian Tax Bill Revealed

Apple paid just $80.3 million in Australian tax last year, despite making more than $6 billion in local revenue, accounts filed with the corporate regulator show.

While a fraction of its overall income, Apple’s tax bill was more than double what it paid the previous year.

The tax-expense figure, disclosed in accounts filed with the Australian Securities and Investments Commission, comes as a Senate inquiry prepares to grill the heads of Australian and multinational corporations over their tax affairs.

It also comes amid an investigation by the Australian Tax Office of tech companies suspected of shifting profits out of Australia.

While the actual amount of tax a company pays is confidential under Australian law, an expense figure is calculated for the purpose of annual accounts.

Professor Antony Ting, at the University of Sydney Business School, said Apple’s latest accounts suggested it was continuing to shift profits overseas.

“It appears that Apple is still able to shift most of its profits from Australia with its tax structure, which most likely is perfectly legal under the current tax law,” he said.

“That leaves little profits, after deducting sales and marketing costs in Australia, to be taxed in Australia.

”

An Apple spokeswoman declined to comment on whether the accounts reflected tax paid accurately.

Apple has been in the spotlight over its taxes in Australia, after an investigation by Fairfax Media last year showed it had shifted $8.9 billion in untaxed profits from its Australian operations to Ireland in the past decade.

It is one of the companies expected to be hauled in front of a Senate inquiry into corporate tax avoidance, with hearings due to start as soon as March.

It follows efforts by the Organisation for Economic Co-operation and Development to clamp down on profit shifting, as governments around the world become increasingly desperate to shore up revenue.

On Tuesday, shadow assistant treasurer Andrew Leigh urged the government to take a lead in getting global agreement on the amount of tax that should be paid by a multinational to each country in which it operates.

He called on regulators to stop online companies such as Uber and Airbnb from dodging their tax obligations.

“It is neither efficient nor equitable to let revenue fall into some dead zone between countries,” he said in a speech to the McKell Institute in Sydney.

“One way to address this would be to establish international consensus on the corporate tax base, and then allow countries to compete on the rate.”

Apple’s Australian entity describes itself as a company that markets products and sells digital software and services. It is controlled by Irish holding company Apple Operations International.

While tax is calculated as a proportion of profit, not revenue, multinational companies including Apple have been criticised for booking revenue offshore, in low-taxing places like Ireland or Singapore, to minimise their reportable profit and therefore their taxes in places like Australia.

The company’s local revenue was down slightly from $6.1 billion a year earlier, when it paid just $36.4 million in tax.

It reported a profit after tax of $171 million, up from $52 million a year earlier.

This news story is reprinted from www.smh.com.au

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Deflation Bigger Threat Than Inflation: AMP

Global deflation is now a bigger threat to economic stability than a surge in inflation, according to AMP’s chief economist Shane Oliver.

Since the global financial crisis, economists have warned that easing monetary policies would cause skyrocketing inflation and would whittle away at the value of currencies around the world. But this prediction “simply hasn’t occurred”, Dr Oliver said in a note published today.

In fact, Dr Oliver said a renewed plunge in bond yields over the last year — to record or near-record lows — suggests that the world may end up with sustained deflation.

He said that falling commodity prices and spare global capacity indicates that deflation is more of a threat than inflation, which has been falling in many major economies.

“December has seen falling consumer price levels in many countries and annual inflation rates are now just 0.8 per cent in the US, [negative] 0.2 per cent in Europe, 0.5 per cent in the UK, 0.4 per cent in Japan,” Dr Oliver said.

In Australia, inflation looks likely to fall below the Reserve Bank of Australia’s 2 to 3 per cent target, which will give the bank more room to cut interest rates to stimulate the economy.

As the European Central Bank gears up for a dose of quantitative easing, and as Japan buckles down on stimulus, it “should help head the threat off” but “it’s worth keeping an eye on”, Mr Oliver said.

“The proportion of countries with hyperinflation is now being matched by a steady advance in the proportion seeing deflation,” he said.

While falling prices for electronic goods are an example of the positive effect of deflation for consumers, falling prices are a concern if they are associated with falling wages and rising unemployment.

Deflation in falling asset prices can spark a feedback cycle of economic woes, and see consumer’s debt weigh more heavily with rising real debt burdens.

“Falling wages and prices would make it harder to service debts. Lower nominal growth will mean less growth in public sector tax revenues making still high public debt levels harder to pay off. And when prices fall people put off decisions to spend and invest, which could threaten economic growth,” according to Dr Oliver.

Dr Oliver said that while deflation would be a good thing for investors who hold gold stocks, or governments who issue bonds, it will make the sharemarket a more volatile environment.

“As the generally easy global and Australian monetary environment continues it will help underpin further gains in growth assets like shares, albeit with more volatility,” he said.

This news story is reprinted from www.businessspectator.com.au

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Australia’s Richest Blow 5 Billion

Group of Australia’s richest individuals and families has lost more than $5 billion combined on the stockmarket in the past 12 months, with shares hit hard by falling commodity prices and uncertain economic conditions.

Billionaire big names such as Andrew Forrest, James Packer and Kerry Stokes have experienced big falls in their shareholder wealth, though Frank Lowy has bucked the trend with his Westfield Corporation shares up about 50 per cent in 12 months.

Mr Lowy has added about $630 million to his share wealth since January last year, during which several of his billionaire peers have watched their wealth slide downwards.

Mining stocks in particular have taken a beating, wiping more than $2.5 billion off the paper wealth of Mr Forrest, the chairman of Fortescue Metals Group.

It has been a similar story for Mr Stokes, the chairman of Seven Group Holdings. The company is a major player in the mining equipment industry through its subsidiary Westrac, which operates Caterpillar dealerships in Australia and China.

SGH shares have fallen about 24 per cent since January 2014, cutting the value of Mr Stokes’ shares by $391 million in that time. The company also owns about one-third of the Australian Securities Exchange-listed Seven West Media.

James Packer has lost about $1.8 billion on paper thanks to a 28 per cent fall in the share price of his Crown Resorts casino and entertainment business.

Crown’s two Australian casinos have been hit by sluggish consumer spending while plans for a $US400 million casino development in Sri Lanka look to have stalled after a change of government.

Other members of the BRW Rich List have seen their wealth hit by a combination of profit warnings or falls from historic highs.

Silviu Itescu, founder of biotechnology company Mesoblast, lost about $131 million from the value of his shareholding in the past 12 months, after several years of gains.

Shares in engineering services firm WorleyParsons took a big hit in late 2013 after a profit fall, and fell throughout 2014 as well. Shares in the firm, chaired by founder John Grill, have also fallen another 10 per cent since the beginning of 2015.

Trading conditions have been tough for WorleyParsons, which derives most of its income from providing services to oil and gas companies.

If falling oil prices force companies in the sector to scale back projects this year, WorleyParsons could take another hit.

Mr Grill has lost almost $200 million from the value of his shares in the past 12 months.

Matt Barrie, the founder and executive chairman of former market darling Freelancer, is likely to lose his position on the Rich List this year.

While Freelancer shares have stabilised after a hitting an all-time low last November, which Mr Barrie blamed on selling too few shares to too many investors in the company’s much-heralded and initially popular 2013 float, the shares are still down 54 per cent in the past 12 months.

That fall has cut about $158 million from the value of Mr Barrie’s shareholding.

He could be replaced on the Rich List by Corporate Travel Management chief executive Jamie Pherous, a former member of the BRW Young Rich list.

Shares in CTM have surged 85 per cent in the last year, adding $113 million to Mr Pherous’s share wealth.

His almost 25 per cent stake in CTM is now valued at close to $250 million, the threshold for entry on the 2014 edition of the Rich List.

Takeover activity or speculation has also boosted the value of shares owned by the Belgiorno-Nettis family in Transfield Services, and James Spenceley in Vocus Communications.

Andrew and Paul Bassat’s shares in online firm Seek increased $112 million in value in the past 12 months, as the company moves towards its 10-year anniversary on the ASX, while Raphael “Ruffy” Geminder’s stake in Pact Group Holdings is up about $90 million in a year.

Elsewhere, after several tough years Gordon Merchant’s stake in embattled surfwear firm Billabong increased by $24 million and a 50 per cent rise in shares in pizza maker Domino’s Pizza Enterprises put $13 million on the wealth of former Young Rich lister Don Meij.

This news story is reprinted from www.smh.com.au

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ANZ Survey Shows Job Ads Rising For Seventh Month In Row

JOB advertisements have risen for the seventh month in a row, signalling better times ahead for jobseekers.
Job ads rose 1.8 per cent in December and were up 11.4 per cent for the year, according to the ANZ Job Ads survey today.
ANZ chief economist Warren Hogan said the figures showed the economy was continuing to produce new job opportunities but not enough to keep up with the number of new entrants to the workforce or job losses in certain sectors.
This news story is reprinted from www.theaustralian.com.au
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Shopping Tax Change Would Mean Shoppers Paid More

It’s the latest conundrum facing the federal government.

Closing a loophole that allows shoppers to spend $999.99 on overseas goods without having to cough up the 10 per cent GST at home might be unfair to Australian retailers who do have to add on the tax to their goods, but it means that consumers get a slightly cheaper price.

News that the federal government will examin the issue as part of its upcoming White Paper on taxation is news to the Australian Retailers Association, which has lobbied hard to have the loophole closed in recent years.

Executive Director Russell Zimmerman admits that if the government falls on the side of Australian retailers it will mean consumers will be facing higher prices. But he thinks shoppers will understand.

“Obviously, consumers are going to end up playing a little more,” he said.

“But I think most consumers in Australia realise there is a need to support Australian industry and support Australian job growth and that is what this is about.”

Mr Zimmerman said Australia’s $265 billion retail industry, both online and bricks and mortar, faced a significant disadvantage while competing with its off-shore counterparts for the Australian dollar.

“If you are a retailer and you are working in Australia – so you are operating within and selling your product in Australia – you have to submit a goods and services tax to the government,” he said.

“But if you move yourself off shore and you sell from off-shore into Australia, then you don’t have to pay that tax.

“If you are based in Australia, you are employing Australians, you are paying tax, you are supporting Australian workers.

“When you are sending things from overseas, as an off-shore retailer, you are not supporting jobs for Australians, you are not paying tax within Australia.”

He estimated that 30,000 jobs had been lost from the Australian retail industry, which employs about 1.2 million people across the nation, and the association would once again make its views known to the government in a submission to its White Paper.

But there was some good news for local retailers. Shoppers hit the Boxing Day sales harder than the year before, spending about $73 million more than in 2013 to bring the 2014 total to more than $2 billion.

http://www.brisbanetimes.com.au/queensland/shopping-tax-change-would-mean-shoppers-paid-more-20141228-12eopq.html

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Benefits of Outsourced audit services

Auditing is the key function to “checks and balances” and is one of the fundamental element for good governance of corporate business. The question which always agitates the Board of Directors of an organization is “How competent and efficient is the internal audit team in the organization?”

Most companies pay hugs to Auditors who are responsible for managing your taxes in all financial situations. Further auditing services can be categorized in Internal Auditors and Outsourced audit services.

The role of an internal auditor must meet your strategic business goals, ensure the integrity of financial and operational information, protect your assets, and comply with local laws and regulations.

On the other hand Outsourced audit services will ensure you a commitment of accuracy and quality work in time.

Benefits of Outsourced audit services are as follows:

1. Service agreements will ensure quality of work within time.
2. Will let you free from complex audit and change to the environment.
3. An experienced team to handle your work.
4. Save time and valuable money.
5. When you outsource you ensure independence and objectivity.
6. Avoiding conflict situation.

BBW Business Services is one of the top Australian Accounting firms specialists in accounting and business services. BBW Business Services provides audit Services which are aimed to complete audits within an agreed time frame with accuracy. The audit service includes Financial Statements, SMSF Audit, Regulatory audits, Tax Accounts & Account Management auditing.

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