Apple’s New Zealand arm returned to growth in its 2025 financial year as revenue edged up against the backdrop of the ongoing economic slump.
The tech giant’s local turnover rose 1.1% to $1.155 billion in the year to June 30, up from $1.143b in its 2024 financial year.
While some of its local peers are owned by subsidiaries in Ireland, the Netherlands or other low-tax territories, Apple actually pays a slightly higher tax on its New Zealand revenue - albeit on the other side of the ditch - by dint of a transtasman setup.
A tax partner at one of the big accounting firms said this was because Apple Sales New Zealand (ASNZ) is owned by the Australian-registered Apple Pty - which means it falls under a tax treaty between Australia and New Zealand designed to avoid double taxation.
A complex setup meant the Australian Tax Office could demand Apple pay tax on its transtasman operation in Australia, because its New Zealand operation was managed from Sydney.
Apple does have boots on the ground in Auckland, but with a focus on firmware and engineering roles - a flow-on from its $100 million-plus purchase of Kiwi wireless charging start-up PowerbyProxi in 2017.
None of the parties will comment on the arrangement this year but the accounts indicate the tax again being sucked across the Tasman.
Apple Sales NZ paid tax of $13.24m, before adjustments at the Australian corporate tax rate of 30% on its pre-tax profit of $44.1m -up from 2024’s $38.1m.
New Zealand’s corporate tax rate is 28%.
A spokesman for Apple said, “Apple pays tax in every country we do business, including New Zealand”.
Beyond corporate tax, Apple products are subject to GST and local salaries to PAYE.
ASNZ’s largest expense was related party purchases from its “immediate parent” (Apple Pty) of $1.048b, followed by $49.5m to other unnamed related parties.
On top of that $882,000 went to expenses charged by ASNZ’s “ultimate parent” (Apple Pty owner Apple Inc).
A spokeswoman for the Australian Tax Office said, “The ATO is unable to comment due to our obligations under taxpayer confidentiality laws”.
An Inland Revenue spokeswoman said ASNZ’s returns fell under the confidentiality restrictions of Section 18 of the Tax Administration Act 1994.
Tight market
Market tracker IDC reported a tight overall global market for Apple’s largest category - smartphones - in the June quarter, with 1.0% year-on-year growth.
“The smartphone market remained positive. However, uncertainty fuelled by tariff volatility, ongoing macro-economic challenges such as forex instability, unemployment and inflation across regions have tapered demand, making consumers deprioritise spending on smartphones,” IDC said.
Apple will be looking to its latest handsets, including the iPhone 17 series and the new iPhone Air, to help boost growth.
In New Zealand, initial demand appeared strong, some models selling out in the first days after their September release.
It will be a while before the full sales story is revealed, however. Apple Inc’s next quarterly financials, due on October 30, will only capture a couple of weeks of the new model’s release.
In the meantime, Apple’s shares hit an all-time intraday high in Monday trading on data from research firm Counterpoint indicating strong early sales for the new iPhones.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.