Apple paid 2% in taxes on $36.8B of foreign revenue for fiscal 2012

Posted:
in General Discussion edited January 2014
Numbers from Apple's 10-K filing with the U.S. Securities and Exchange Commission reveal that the company paid only 1.9 percent in income taxes on $36.8 billion of foreign revenue for the 12-month period ending on Sept. 29.

After accounting for $490 million in deferrals, Apple paid a total of $713 million in foreign income tax over the past year, equating to only a fraction of the combined $13.32 billion in U.S. federal and state taxes that were levied at a rate of 35 percent.

As noted by The Washington Post, Apple's growth in foreign markets has been a main driver to the company's continued success, with this year's $36.8 billion in pretax earnings representing a 53 percent increase from fiscal 2011, when the company brought in $24 billion. In 2010, Apple paid a foreign tax rate of 1.2 percent on earnings of $13 billion.

Fiscal 2012 Taxes
Tax numbers in million of dollars. | Source: Apple


The high U.S. corporate tax rate has prompted many American multinationals to leave cash in foreign accounts, as repatriating the money would cause it to be subject to taxation.

As of Sept. 29, $82.6 billion of Apple's cash, cash equivalents and marketable securities were held by foreign subsidiaries. The is up 52 percent from 2011, when the company had $54.3 billion in offshore holdings.

Apple does account for a portion of its foreign profits as subject to U.S. taxation, however, which is recorded in quarterly statements as a liability. These so-called "phantom" tax obligations could theoretically be eliminated, thereby raising the company's profits by up to $10.5 billion for the past three years.

Where Apple does differ from other companies is that it sets aside a portion of the foreign profits, marking them as subject to U.S. taxes sometime in the future.

When Apple reports quarterly results, it records that portion of the taxes as a liability, which is subtracted from its profits even though it hasn?t actually paid the taxes.

Tax experts say that Apple is unlikely to make such a move, however, as erasing the huge U.S. obligation would be detrimental to its stature as a responsible tax payer. According to The Post, the Cupertino company is said to be lobbying to change U.S. tax law to ease repatriation costs if and when it decides to bring the money back into the country.
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Comments

  • Reply 1 of 191


    Disgusting.

  • Reply 2 of 191
    mj1970mj1970 Posts: 9,002member


    Cue: Socialists and Marxists.

  • Reply 3 of 191


    Wow...so much for bringing the labor back home.

  • Reply 4 of 191
    sflocalsflocal Posts: 4,500member

    Quote:

    Originally Posted by Bloodshotrollin'red View Post


    Disgusting.





    Yes, I think you are too.  Your username fits you nicely.

  • Reply 5 of 191
    "In 2010, Apple was paid a foreign tax rate of 1.2 percent on earnings of $13 billion."

    Wow, Apple "was paid" tax. And the rest of us pay it. No wonder the profits are so high!
  • Reply 6 of 191
    mstonemstone Posts: 11,510member


    Another reason the manufacturing will never come back to the US. Apple most likely uses that foreign cash to pay for all the manufacturing essentially money laundering it and sending the finished goods back to the states which they then resell to get their money into the country without paying any additional taxes.

  • Reply 7 of 191
    solipsismxsolipsismx Posts: 19,566member
    I wonder who will claim Apple didn't pay what was legally required of them.
  • Reply 8 of 191
    sflocalsflocal Posts: 4,500member


    Please change the title to "Apple LEGALLY paid in taxes"



    Anyone that doesn't do what they can to legally minimize their tax liability is simply ignorant.  All of you would do the EXACT same thing too.



    So what should folks and companies do?  Pay more taxes to make you feel better?



    Apple made most of their profits overseas and paid whatever taxes needed to be paid on that revenue in the appropriate country.  Why should they have to pay more for the "privilege" of bringing the money home??  I don't think its right.



    If whiners like you need to be mad, be mad at the governments of the world.  They were appointed by the people and the laws written too were passed.  Don't hate the player, hate the game.



    Waiting for all the liberal "I want something for nothing" whiners to come out of the woodwork.

  • Reply 9 of 191


    The problem is in our tax code. If you are a U.S. citizen living abroad, your income past a certain level is taxed by the US Govt. Of course, you get a tax credit for any income taxes already paid in the foreign country where you made that money.


     


    Perhaps we should treat corporations like living people, instead of creating incentives to leave their money on overseas.

  • Reply 10 of 191
    mj1970mj1970 Posts: 9,002member

    Quote:

    Originally Posted by freddych View Post


    The problem is in our tax code. If you are a U.S. citizen living abroad, your income past a certain level is taxed by the US Govt. Of course, you get a tax credit for any income taxes already paid in the foreign country where you made that money.


     


    Perhaps we should treat corporations like living people, instead of creating incentives to leave their money on overseas.



     


    Or they could lower taxes.

  • Reply 11 of 191


    The US has the highest corporate tax rate in the world after Japan lowered theirs 2 years ago. If I had to pay those kind of rates I'd avoid it also, especially when the US government is one of the least efficient and most fiscally wasteful governments around. Quit punishing businesses for success so you can go on spending sprees to buy votes.

  • Reply 12 of 191
    robbyxrobbyx Posts: 474member
    mstone wrote: »
    Another reason the manufacturing will never come back to the US. Apple most likely uses that foreign cash to pay for all the manufacturing essentially money laundering it and sending the finished goods back to the states which they then resell to get their money into the country without paying any additional taxes.

    And they don't pay any taxes on the profits from the sale of those goods, right? The sale of those goods generates no sales tax either, right?
  • Reply 13 of 191


    As long as they pay their fair share in the US, who gives a shit!


     


    That, by the way, is why they won't pull out of the UK market for those who recently said that they should!

  • Reply 14 of 191
    mj1970mj1970 Posts: 9,002member

    Quote:

    Originally Posted by robbyx View Post



    And they don't pay any taxes on the profits from the sale of those goods, right? The sale of those goods generates no sales tax either, right?


     


    You raise good points. You also forgot the property taxes Apple (and other companies) pay. The focus tends to be entirely on income taxes as if these are the only ones.


     


    But probably the more important point is that Apple doesn't pay taxes at all. Every dollar Apple pays in taxes (however small or large) is paid by its customers.

  • Reply 15 of 191
    hattighattig Posts: 830member
    Pretty scummy really, definitely avoiding the moral obligation to pay taxes.

    It may be to the letter of the law, but it certainly isn't to the spirit of the law. However the laws won't be changed because the people in power would also have too much to lose due to their own business interests.

    Leaving the money in offshore accounts, tax not paid, whilst waiting for and lobbying for a lower rate of "repatriation tax" is fairly close to money laundering in my book. Pay the tax in a timely manner guys.

    Personally I'm in favour of a "sold something in a country - then pay corporation tax on the profits of that sale in that country" OR (nothing else) "pay corporation tax ONLY in the country you were first registered in, on worldwide profits".

    (The first can be simplified down to the government setting zero rate corporation tax and far far far higher sales taxes (30% ) to cover for the loss in corporation tax income.)
  • Reply 16 of 191
    archarch Posts: 66member

    Quote:

    Originally Posted by robbyx View Post





    And they don't pay any taxes on the profits from the sale of those goods, right? The sale of those goods generates no sales tax either, right?




    If Apple is so 'innovative' in managing income tax, I don't know why they are not doing something about sales tax. If I buy a Mac or any other stuff in the US from Amazon, I do not get charged for sales tax but on Apple online store, I do.

  • Reply 17 of 191
    Re: Soli... I wonder who will claim Apple didn't pay what was legally required of them.

    I'd say not long at all. See Blood's entry - 1st comment.

    I'm in the UK too, but as long as they've paid all they're required to...
  • Reply 18 of 191


    Originally Posted by Hattig View Post

    Pretty scummy really, definitely avoiding the moral obligation to pay taxes.


     


    Sounds like they're paying taxes to me. Look, it's right in the title! Or maybe you're using "moral" in an ironic sense. Like "it's ironic that you didn't even read the title before posting".


     



    …it certainly isn't to the spirit of the law.


     


    So every single person who has ever wanted to pay less in taxes, every middle income family who takes the time to sit down and look at their options, every person who took a look at the varying tax rates and decided to take less income from one place to get lower taxes in another, they're all morally bankrupt? We should just give all our disposable income to the government in taxes?






    Originally Posted by arch View Post

    If Apple is so 'innovative' in managing income tax, I don't know why they are not doing something about sales tax. If I buy a Mac or any other stuff in the US from Amazon, I do not get charged for sales tax but on Apple online store, I do.



     


    What do you want them to do, lobby for the repeal of sales tax? Lobbying is stupid. Repealing sales tax isn't an answer. And Amazon gets the boot on that in a few… what is it, months?

  • Reply 19 of 191
    mj1970mj1970 Posts: 9,002member

    Quote:

    Originally Posted by Hattig View Post



    Pretty scummy really, definitely avoiding the moral obligation to pay taxes.


     


    Bullshit. There is no such "moral obligation."


     


     


    Quote:

    Originally Posted by Hattig View Post



    It may be to the letter of the law, but it certainly isn't to the spirit of the law.


     


    image


     


     


    Quote:

    Originally Posted by Hattig View Post



    Leaving the money in offshore accounts, tax not paid, whilst waiting for and lobbying for a lower rate of "repatriation tax" is fairly close to money laundering in my book.


     


    Uh huh. image Maybe you need a new book then.

  • Reply 20 of 191
    mj1970mj1970 Posts: 9,002member

    Quote:

    Originally Posted by arch View Post


    If Apple is so 'innovative' in managing income tax, I don't know why they are not doing something about sales tax. If I buy a Mac or any other stuff in the US from Amazon, I do not get charged for sales tax but on Apple online store, I do.



     


    Apple is complying with the law here. Albeit it is a stupid law, they are still complying with it.

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