Roger Fingas
Apple managed to avoid paying $65.08 billion in U.S. taxes last year by keeping $218.55 billion offshore, according to a study produced by an activist group and a non-partisan think tank.
The sums made Apple the biggest avoider of corporate taxes in the U.S., said Citizens for Tax Justice and the Institute on Taxation and Economic Policy, quoted by the U.K.'s Daily Mail. The organizations noted however that three quarters of Fortune 500 companies used offshore tax havens, cumulatively funneling $2.42 trillion and dodging $715.62 billion in American taxes.
The top 30 U.S.-based companies ranked in the study operated 2,509 subsidiaries in tax havens.
Following Apple, the next biggest offshore holder was pharmaceutical giant Pfizer, which relied on 181 subsidiaries to funnel $192.57 billion in income.
"The hard fact is that the US tax code incentivizes tax haven abuse by allowing companies to indefinitely defer taxes on offshore profits until they are 'repatriated'," argued the Institute on Taxation and Economic Policy's Matthew Gardner.
While the U.S. is Apple's home and its most important market, most of the company's revenues and cash reserves have been kept overseas. The iPhone maker has refused to repatriate those reserves unless it's granted a "tax holiday" reducing the amount of money it owes.
As for revenues, for years Apple has funneled billions from various countries through its Irish subsidiaries, exploiting loopholes to pay extremely low tax rates. The arrangement eventually drew the scrutiny of the European Commission, which in August ordered Ireland to collect $14.5 billion in back taxes. Both Apple and the Irish government have vowed to fight the decision — the latter has been working to close some of the loopholes, however.
Marko Zivkovic
Christine McKee
Malcolm Owen
Amber Neely
Andrew O'Hara
64 Comments
The last "tax holiday" was granted by the US in 2004 for multinational companies. The rate was heavily reduced to a mere 5.25%. I as a small business owner pay about 35% on my profits. Corporations like Apple expect another Reparation tax holiday sooner or later so there is little incentive to bring this money back to the US until Congress caves in. How did this all happen? Well look at the people we citizen elect to political office, who funds their campaigns, who are they in debt to when the get into office? It is not the US citizen but these huge corporations. Laws are written to make these tax havens possible as a pay back for a cushy seat in Congress. Are corporations like Apple breaking the law? Not as the law is written. Is Apple morally wrong for taking advantage of these laws? Yes. Tax breaks and incentives were originally designed to help small to large businesses grow and have positive impact on a local or regional area. These incentives often have time limits unlike these tax haven laws. I am a big fan of Apple's products and services and have been for decades but don't let you love admiration of this company blind you to the fact they are positioned as many huge international corporations above the tax laws most citizens must follow.
I don't understand why any profits generated on sales abroad should be expected to be taxed in the US also?
If I emigrated to Australia for example and worked there I'd expect to only pay tax in Australia, not to Australia AND my home country.
If the companies were shifting (or hiding) profits offshore to actively avoid paying tax then that's a different matter but as far as I know, Apple doesn't sell in the US via Apple International so all sales in the US is declared and taxed as such.
If Apple did nothing illegal then what's the problem?
Why should Apple pay taxes to a country that treats them like s*it and doesn't honor their patents?
DELAYED paying taxes.
“Citizens for Tax Justice and the Institute on Taxation and Economic Policy” Typical monikers for extreme left wing socialist organizations. Notice how the terms “tax avoider” and “tax haven abuse” are used instead of “illegal” and “fraudulent.” Those terms would get them sued for slander. Subjective labels with wide open interpretations are the norm for outfits like this. Plant the thought seed of illegality without actually saying it. If these outfits want to get their hands on some of that $65 billion then pressure Congress to reform the tax code. Tim Cook said he would be happy to repatriate those off shore assets if conditions were right. By the way, I personally AVOID paying every tax dollar I can by paying a tax accountant to find every legal deduction and loophole possible. I don’t give a rats ass about “fairness” or “tax justice. I care about paying as little tax as possible and I sure as hell won’t be sending an additional check to the Treasury because I “feel” guilty.