Facing the Senate Inquiry into multinational tax avoidance today, Apple, Microsoft and Google execs revealed they were three of about a dozen tech companies being audited by the Australian tax office.
Apple Australia managing director Tony King said just before the audit began, between 6 and 12 months ago, the company was about to begin discussions to renew its Advanced Pricing Agreement with the tax office. (An APA enables companies to reach an agreement with the tax office on the future application of arm’s length pricing. The arrangement generally covers a period of three to five years.)
“I believe our agreement expired and we were in renewal,” he said. “Our desire is to renew our APA with the ATO.”
King said: “we are fully cooperating” with the audit which he described as “rigorous” and that the ATO has not given the company an estimated end date.
King cited the APA to try and explain how much of the $16.99 paid to buy an album on Apple’s iTunes store in Australia was taxable income. But he could not give the senate a figure.
“I’ll take that on notice,” he said.
Google Australia boss Maile Carnegie and Microsoft’s corporate vice president of tax, Bill Sample, also confirmed their entities were being audited by the tax office.
Neither Google, Apple or Microsoft have a current APA agreement with the tax office.
“We continue to work under the assumptions of our old pricing agreement in calculating tax,” King said.