Apple faces scrutiny again after paying no 2012 corporate taxes in UKApple may once again come under the spotlight over taxes, as the iPhone maker's latest filings reveal that it paid no corporate taxes in the United Kingdom last year, despite having pulled in billions of dollars from its European operations.
Headquarters of Apple Sales International in Ireland, which handles most of Apple's overseas revenue.
Deductions from share awards to employees essentially negated Apple's corporate tax liabilities in the UK through September of last year, The Financial Times reported this week. Apple's U.K. subsidiaries Apple (U.K.), Apple Europe, and Apple Retail U.K. reported pre-tax profits of £68 million in the year through September 2012, with some £27.7 million in taxes deducted due to
Apple's sales in the United Kingdom accounted for less than 10 percent of its overall sales.
The California based company's European operations pulled in $36.3 billion in net sales to European customers in 2012. Of that, Apple reported that $15 billion was operating profit.
Those European sales, along with Apple's other international operations, make up nearly two-thirds of the company's revenue. Much of that revenue is routed through Apple Sales International, an Irish subsidiary that due to Ireland's tax structure is not listed as a tax resident anywhere. That status allows Apple to pay just 0.05 percent in taxes in Ireland, a rate that contributes greatly to the company's massive profitability.
Apple has recently come under fire in the U.S. and abroad for what many have called tax avoidance. Most recently, Apple chief Tim Cook and a number of other Apple executives were called to testify before a Senate subcommittee to defend the low tax rate Apple pays on its overseas earnings. Cook maintained that Apple had done nothing wrong.
"We pay all of the taxes we owe," Cook said, "every single dollar. We not only comply with the laws, but we comply with the spirit of the laws."
The new U.K. tax revelation is not the first time Apple has garnered scrutiny due to its tax practices in that country. Last year, a British report found that basing its operations out of Ireland allows Apple to pay about half the U.K, taxes it would otherwise. A similar report from Spain's El País showed that Apple had routed 99 percent of its Spanish sales through its Irish subsidiary. That allowed Apple to pay about 2.6 million euros in taxes for the yeari in Spain, even though sales at Spanish Apple Stores were up 86 percent.
On Topic: General
- Review: Atlas Wristband is an ambitious but flawed strength training tracker
- This week on AI: Apple Car secrets, iPhone & iPad launch dates, a Dr. Dre TV show & more
- Bug in Adobe Creative Cloud updater erases root level Mac data
- Apple, Inc set to open new $25 million tech center in Hyderabad, India by June
- Apple Music passes 11M subscribers as iCloud hits 782M users