Apple faces tax questions as iPhone sales drop

Apple iPhone sales are slowing which has many asking the question: has the tech giant has lost its ‘cool’?

Apple iPhone sales have dropped for the first time since the product was launched, leading many to speculate Apple is no longer the product of choice for consumers.

“I wouldn’t necessarily say that," Rae Johnston from Gizmodo said, pointing to the company’s latest earnings.

"There is still a huge market out there for Apple.’’

Close to 75 million iPhones were sold in the latest quarter, the lowest number since the product first launched in 2007.

“Apple’s problem right now is that 63 per cent of its revenue relies on the iPhone and analysts have been looking at this and they have been predicting that there will be a drop in sales,” Ms Johnston said.

The company has little need to panic just yet, according to its latest earnings report, quarterly revenue was posted at $US75.9 billion. Its quarterly profit was listed at $US18.4 billion.

Apple Australia, though, is being questioned over how much income tax it pays.

Despite making $7.86 billion in local revenue last year the California-based giant paid just $85 million in Australian income tax, roughly 1 per cent of its revenue.

“Apple is just the tip of a very large iceberg companies with multinational operations can really do all sorts of things to minimise their tax,” Independent Senator Nick Xenophon said.

Late last year the Federal government passed tax avoidance laws, forcing companies with a global turnover of $1 billion or more to provide greater transparency.

Labor said the laws did not go far enough but with the support of the Greens they passed.

"The Coalition government is committed shutting down tax avoidance strategies used by multinationals, such as large IT companies, who have exploited gaps and mismatches in the international tax system,” Treasurer Scott Morrison said.  

Apple has always insisted it pays the correct amount of tax but it's believed to have paid back taxes of $11.6 million.