How Apple Sidesteps Billions in Taxes [Report]

Posted April 29, 2012 at 4:11pm by iClarified | Please help us and submit a translation by clicking here | 10965 views

The New York Times reports on Apple's tax strategy that aims at low-states and nations.

While the company has remade industries, ignited economic growth and delighted customers, it has also devised corporate strategies that take advantage of gaps in the tax code, according to former executives who helped create those strategies.

Apple, for instance, was among the first tech companies to designate overseas salespeople in high-tax countries in a manner that allowed them to sell on behalf of low-tax subsidiaries on other continents, sidestepping income taxes, according to former executives. Apple was a pioneer of an accounting technique known as the "Double Irish With a Dutch Sandwich," which reduces taxes by routing profits through Irish subsidiaries and the Netherlands and then to the Caribbean. Today, that tactic is used by hundreds of other corporations - some of which directly imitated Apple's methods, say accountants at those companies.


If Apple didn't use such methods to reduce its taxes it would have had a tax bill $2.4 billion higher, according to former Treasury Department economist, Martin A. Sullivan. Apple paid cash taxes of $3.3 billion on $34.2 billion in profits last year, a tax rate of 9.8%.

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matrixmaniac - April 30, 2012 at 3:13pm
Rubbish: This innovation was NOT invented by Apple at all... This is common practice in many industries for decades (centuries in some cases (e.g. Pharmaceuticals)). It's not illegal and -for a company- certainly less unethical than if an overpaid manager tries to hide away his or hers private capital... I'm very surprised that Americans pretend to be upset about this as it's perfectly following the holy rules of pure capitalism... First implement a bit of care for your "neighbors" in your own thinking before blaming Apple for doing it's business right.
H - April 30, 2012 at 1:42am
Because you knowonce they have all that free money untied when the tax code is rewritten they won't give it to all their executives. They do the right thing and EVERYONE will get more money. if you believe that then I have a bridge to sell you.
Mike - April 30, 2012 at 12:55am
IDIOTS!!!!
What??!! How?!!! - April 29, 2012 at 10:29pm
These Apple iCrooks need to Pay The Piper! Come on Uncle Sam take a bigger chunk outta that bad apple!
Russell - April 29, 2012 at 11:12pm
And lose all of that cash that Apple gives to the Obama campaign? I don't think so.
Reaganator - April 29, 2012 at 9:51pm
This is nothing new, most companies will leave one state for another in order to save money. It's not illegal or unethical just good business practice. Paying less in taxes means they can pay higher wages and hire more people. If the U.S. had a better tax system they might keep more business in our country and pay more workers here and those workers would pay their taxes here. I can't blame Apple for doing what is best for Apple.
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