A US Senate inquiry into Apple's use of tax havens has revealed that products sold in Australia are handled by a number of offshore subsidiaries, bolstering Apple's offshore profits.
Documents filed by US congressional investigators claim Apple products manufactured in China are resold to Apple retailers in Australia after an Irish subsidiary takes ownership of the products mid-transit - but only on paper.
The Irish subsidiary, known as Apple Sales International, resells the product to Apple retailers in Australia at a substantial profit, despite never possessing the product.
"ASI never took physical possession of the products it ordered from the third-party manufacturer," the report says.
"ASI took title to the manufactured products while they were being shipped to Apple's Asian distribution centres.
"When they arrived, ASI sold the products to Apple Singapore at a substantial profit."
Before a reorganisation in 2012, the same structure applied, apart from the inclusion of Apple's Singapore subsidiary.
Products would be resold directly to Australian retailers.
"For example, ASI purchased the finished goods from the manufacturer in China and then resold them to an Apple retail store in Australia, with ASI taking ownership of the products while in transit to Australia, then reselling them at a substantial profit to the Apple retail entity upon arrival."
The documents also outline how Apple uses a global network of subsidiaries to shuffle profits around the world through low-tax jurisdictions such as Ireland and Singapore, to avoid paying higher taxes elsewhere.
US investigators said "disregarded entities" such as the ones in Ireland and Singapore were used to avoid US income rules on foreign company sales.
"The rules are designed to prevent multinational corporations from setting up intermediary entities in tax havens for no purpose except to buy finished goods and sell them on to related entities," they said.
"Dodging these rules allowed Apple to concentrate profits from the sales revenue in the tax havens." The documents were based on testimony from top Apple sales executives.
Apple chief executive Tim Cook defended his company to senators on Tuesday, after they accused his company of avoiding billions of dollars in US tax.
"Our foreign subsidiaries hold 70 per cent of our cash because of the rapid growth of our international business," he said.
"We use these earnings to fund our foreign operations, such as spending billions of dollars to acquire new equipment to make Apple products and to finance construction of Apple retail stores around the world."