Apple is cutting edge in tax avoidance.
If you thought their technology is good their tax strategies are very good. They keep a small corporate office in Reno Nevada ( a no corporate tax rate state) where they base their operations from with only a few people manning the place. The real work is done in California at 8.84% corporate tax rate and in about 20 other states. That is just the U.S. operations. The overseas manufacturing etc. is an enormous advantage for them.
They have offices for tax purposes in countries like Ireland, Luxembourg, Virgin Islands etc where the tax advantages give them breaks amounting to billions of dollars.
Legal tax dodge
The New York Times is saying that the method nicknamed the “Double Irish With a Dutch Sandwich,” is where they send their profits from Ireland to the Netherlands and then to the Caribbean. This scheme has now been copied by others.
Apple’s digital downloads like the Itunes don’t care where they originate from in the web connected world and therefore they are coming to us from countries where the tax code is extremely advantageous to Apple.
Apple is writing the new book on taxes.
The company paid $2.4 billion less in federal taxes in the U.S. last year than it would have if it didn’t learn to do the fancy tax dance that it does. Apple’s rate of 9.8% doesn’t compare with Walmart’s 24%.
Apple is following the tax rules
Apple isn’t doing anything illegal and they say so claiming that the company “has conducted all of its business with the highest of ethical standards, complying with applicable laws and accounting rules.” They go on to say that they are incredibly proud of all of their contributions, and that they pay an enormous amount of taxes, which help our local, state and federal governments.
Apparently it is true that they are on the up and up and more power to them if they can get away on the cheap. Of course their methods will lead to possible reform in the tax code…maybe. Currently the political battles in Congress leaves it as a useless entity that won’t be doing anything to change Apple’s “Double Irish With a Dutch Sandwich” and their other tax loopholes anytime soon.
What would you do?
Come to think of it, I might do the same if I were in their position.
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