Study claims Apple avoided paying $65.08B in US taxes in 2015 through offshore arrangements
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.
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.
Comments
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.
Why should Apple pay taxes to a country that treats them like s*it and doesn't honor their patents?
Why dont these reports show much taxes Apple did pay in the US?
Its just a situation where Apple is raking in TONS of revenue and everyone around the world thinks they deserve some of it. Its me or you winning the lottery for $100 Million and now everyone thinks you owe them money and will go to great lengths to get it.
Apple didn't avoid anything...they used the taxes laws that are in place. I don't know what is so hard for people to understand this. If this was illegal, it would have been stopped years ago and someone most likely would have been arrested as a result.
But then, analysis of political issues like this is generally beyond the comprehension of the public.
I'd love to see a comprehensive tax policy that keeps accounting tricks out of honest to goodness buying and selling. Instead of large corps paying near zero and small businesses paying higher rates because they can't use loopholes, let them all pay a similar rate, say 20% or so. But hey, I want to ride a flying unicorn over a rainbow too. Won't see that happen anytime soon either.
I honestly think that Tim Cook and the Board should save Apple this stupid PR and money-grabbing-by-all-and-sundry headaches, take its lumps, bring the cash back to the US, pay the $30B, and move on. Then, let's see if these little non-US scolds and nitpicks can deal with the US Treasury to get their fantasy tax dollars.
If a company pays taxes on earnings/sales made in a foreign country, (and also pays the taxes on domestic earnings/sales), why should they pay again for repatriating those already taxed earnings. As long as there is a way to control gaming the rules so that a domestic sale isn't funneled through a foreign sales agent, I don't see why corporate earning have to be taxed twice. And as has been pointed out already on the board, money that flows to shareholders as dividends gets taxed again according to the tax bracket of the individual or entity that holds the shares.
I'm a supporter in progressive taxation for individuals, but there has to be more common sense applied to corporate taxation, not just milking the most successful companies that we have.