Apple Australia’s profit plunged 97% after the taxman knocked on the door

Tim Cook. Photo: Chip Somodevilla/Getty Images.

Apple Australia’s net profit for its financial year to September 24, 2016, fell by a massive 97%, largely due to a tax “adjustment” for previous years.

The financial report, published on Friday, shows Apple Australia made just $3.67 million net profit for last year, compared to $123 million in 2015.

The small profit came off a revenue base of $7.57 billion, which was a $296 million drop from the previous year’s figure of $7.86 billion.

Apple Australia’s tax bill for its 2015-16 financial year amounted to $128.2 million, up 51% from the previous year’s $84.9 million.

The company explained that its latest tax bill consisted of $58.4 million for an “adjustment relating to prior years”, as well as $69.8 million for the 2016 year.

The company also noted that the Australian Taxation Office is currently auditing the organisation for its tax liabilities in 2012.

Business Insider has contacted Apple Australia for comment.

In Europe, Apple was in hot water last year for its relationship with the Irish government, which granted the American tech giant special tax status. The European Commission ordered Apple to pay $19 billion in back taxes last August, ruling Ireland had provided it “illegal state aid”.

In 2015, the Australian government announced it would closely monitor the behaviour of multinationals offshoring income. A senate enquiry that year saw Apple, Microsoft and Google executives called up to explain their practices, while then-treasurer Joe Hockey said the ATO had a target list of 30 companies to audit.

Hockey then brought in the so-called “Google Tax”in January 2016, saying he wanted the concept to go global.