Tech | April 30, 2012 | 37 comments

How Apple Avoids Billions in Taxes Worldwide

source: http://www.truthdig.com/eartotheground/item/how_apple_kicks_off_billions_in_global_taxes_201...

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Incredulous
By putting an office in Nevada, where there is a zero percent corporate tax rate, Apple avoids paying the millions of dollars in taxes that would be levied in California, the home of its headquarters.

The company is set to make $41.4 billion this year, which would mean lots of revenue for the various countries where it does business if it didn’t exploit tax loopholes.

Without such loopholes, Apple’s U.S. federal tax bill would have been $2.4 billion higher last year, according to Treasury Department economist Martin A. Sullivan. In total, the company paid $3.3 billion in international taxes on profits of $34.2 billion. Wal-Mart paid $5.9 billion on profits of $24.4 billion (http://www.truthdig.com/eartotheground/item/how_apple_kicks_off_billions_in_glob...).

Read The New York Times’ detailed report to get the story in full. —ARK

The New York Times:
Setting up an office in Reno is just one of many legal methods Apple uses to reduce its worldwide tax bill by billions of dollars each year. As it has in Nevada, Apple has created subsidiaries in low-tax places like Ireland, the Netherlands, Luxembourg and the British Virgin Islands — some little more than a letterbox or an anonymous office — that help cut the taxes it pays around the world.

Almost every major corporation tries to minimize its taxes, of course. For Apple, the savings are especially alluring because the company’s profits are so high. Wall Street analysts predict Apple could earn up to $41.4 billion in its current fiscal year — which would be a record for any American business.

http://www.nytimes.com/2012/04/29/business/apples-tax-strategy-aims-at-low-tax-s...
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37 comments // How Apple Avoids Billions in Taxes Worldwide

  • Naumadd
    • 0
      Naumadd  

    • I have absolutely no problem with Apple avoiding taxation. I only wish I and many others could find a way to do the same. One can hardly argue that Apple has done nothing to improve the quality of life of many in California, many in the United States and many around the world. If, having given so much to our culture, it is still not enough for you, well, the problem isn't Apple.

      A nation isn't prosperous because of taxation - it is prosperous by the hard work and innovation of companies like Apple. Try to imagine, at least for a moment, what your standard of living would be like without industry.

    • 1 year ago
  • alexandrekBack
    • -1
      alexandrekBack  

    • they are stretching human labour to slavery, tax dodge like no one, for what, just amassing a 100billions treasure, what's the point of so much abuse if you don't even use it...
      pathetic, greed as its worst

    • 1 year ago
  • good_stuff
    • 0
      good_stuff  

    • Not to mention that I can no longer use standard headphones or my Iphone 3 stereo docking station with my new Iphone 4. Apparently they changed the "pin configurations". Hooray, now I get to buy all new devices. Hopefully the new ones are backwards compatable with my wife's Iphone 3S.

    • 1 year ago
  • chew_chew
    • +1
      chew_chew  

    • I see some ideas - further down this thread - about putting a computer together from purchased parts, rather than buying a name brand computer. I believe that may be what my wife and I do next time.

      I had decided to purchase a Mac next time. I had a two year experience with Vista (Win 7, now, which seems to be working ok, so far), and was - for all practical purposes - unable to use the computer for anything other than web surfing and email the entire 2 years. And software crashes were more frequent than my bowels.

      But after learning of this China labor thing, I cannot in good conscience purchase an Apple product. And now to learn they (Apple) pay *no* taxes really chaps my arse.

      Thanks for sharing, Incredulous.

    • 1 year ago
  • Incredulous
  • COMMONSENSEFORCOMMONGOOD_COM
    • +1
      COMMONSENSEFORCOMMONGOOD_COM  

    • Considering their abusive disSERVICE & ineptitude, I am leaning in any other direction. I bought the macbook pro 17", time capsule, apple t.v.,..., and extended glorified/preferred service (apple care or whatever they call that), and ipod touch...and more, in one fell swoop. I downloaded an apple update and it threw my Dell off the time capsule router, and apple care could not tell me why nor would they assist me in reconnecting it, because it was not an apple product. When my mac began dragging, freezing and locking up, apple care told me to take it in to the store, it sounded like a processor problem to them. I took it in, waited 15 minutes to sign in to the cue, and 25 minutes to get tech help. After waiting 15 to 20 for them to test my system, they gave me a receipt because they diagnosed the need to replace the hard drive. I picked it up and once back at home, not only did my original problem continue, but they somehow damaged my disk reader and apple care told me to take it back to the store. At the store, after the 45 minute process to get to a tech, I told him precisely what was occurring and what apple care stated. Since the store was slammed, he said that he was going to take it in the back to conduct a test on it. 30 minutes later I sent someone back there to look for him because now I was running late for an appointment. Even though he sent a message he'd be right out, it took 21 more minutes for him to do so. When he came out, he stated that my disc reader wasn't working (which is precisely what I told him in the beginning), but didn't recognize anything else wrong with it. I said look, it's continually freezing up and dragging. Apple care says it's the processor. So instead of giving me a receipt in the beginning to check it out, he made me wait nearly an hour only to partially repeat my words and dispute that my machine was malfunctioning. I said look, you have apple cares number and the computer's number, call them and work it out, but don't call me to pick this up until it's working. After a couple of weeks, I had to call to find out the scoop. Oh, your computer's been ready to pick up for a week now. What did you do to it, I asked. We replaced the disc reader, in whatever terminology they refer to it. And what about the dragging and freezing, I asked. I see no notes on that she stated. Well that's the problem that I brought it in for twice now. Well, she said, when you come to pick it up you can speak with the tech about that. THAT'S when I launched. Are you telling me that I have to stand in line for an hour to pick up my computer and then have to wait another half hour for someone to test it to confirm that it's dragging and freezing, instead of you testing for that while you have it already? After I brought it in twice for that very issue! Well I won't, I declared! If this is apple care, then I want my money back! Because this is apple abuse, I stated! If you are telling me that you are not going to trouble shoot that issue while you already have it and remedy it before I get there, then I'm calling Apple corporate and enlightening them to just how abusive and much of a disservice their apple care is. I'm sorry, but all I can do is what the techs instructions specify, or some other such "blow off." Recognizing this is an apple issue, and not an employee issue, I thanked her for her time and hung up. Immediately, however, I googled Apple with the intention of phoning customer service. LO & BEHOLD, I could not locate a direct line for apple customer service anywhere! All I could find was a direction back to store level customer service. Apple has every appearance of being so confident in the demand for their product that they have become indifferent to customer service experiences and needs. The wait times are as bad as at a busy Dr.'s office and malpractice seems to be a consistent result. I regret spending a small fortune on apple products, and am so glad that I never went the route of the iphone, which was only in part because i didn't want ATT at the time, as it was poor quality in my area. But while I've been standing in line so often for apple disservice, I've listened to SO MANY customer reports about iphone problems. I never had a problem with my blackberry. But I don't need to use that often either. The bottom line, I believe that apple has lost it's edge of excellence, because nothing redeems customer indifference. I would rather have a good product with dependable customer service when I need it, than a better rated product for which I can't get dependable customer service when I need it, even when I pay for preferred status service.

    • 1 year ago
  • Incredulous
    • +1
      Incredulous  
    • COMMONSENSEFORCOMMONGOOD_COM:

      Wow, sounds exactly like the scene my sister just went through with an HP she was purchasing at Best Buy....she spent hours in the store waiting for them to supposedly wipe the hard drive, only to have them tell her the next day, when she still didn't have the computer she paid for, that the hard drive was fried....I'm sure their Geek Squad fried the hard drive, and Best Buy has such notoriously bad customer service, it doesn't matter what product they are selling, they suck. I have never invested in apple care, nor would I, and like you, I kept the Blackberry....no problems.

      The issues you are describing though....I've seen that kind of customer service lately in just about every single service sector...from fast food to electronics. Typically, there are a bunch of people working part-time running the place. No one seems to be seriously dependent on or invested in their job, it's a bridge to somewhere else they are hoping to get to. It is not only what is wrong with apple, it is what is wrong with so much of an economy driven by consumption rather than production. sigh....

    • 1 year ago
  • Paratus
    • 0
      Paratus  
    • COMMONSENSEFORCOMMONGOOD_COM:

      Apple doesn't really sound any worse than any other company witha large market share. None of them seem to care a lot about the individual user. I have a MacBook Pro. It's ok, the only thing I use if for is the internet. Don't have any problems with it

    • 1 year ago
  • Incredulous
  • Paratus
    • 0
      Paratus  
    • Incredulous:

      I bought the Mac because of the operating system and the lack of a need for anti virus programs not for any other reason. I don' t have any problems with it but had a lot of problems with PCs.
      I am happy for Mr. Barksdale but the reasons I gave above are the reasons I got the Mac and does not have anything to do political philosophy, philanthropy or anything else.

    • 1 year ago
  • MSII
  • Ricky84
  • Incredulous
  • MSII
  • MSII
    • +2
      MSII  
    • Incredulous:

      I've built my own for many years, it's not so hard (and I use watercooling)! Just like anything buying a "name brand" is just, I'll be polite and say not necessary. Paying for a name is needless.

    • 1 year ago
  • APimpNamedSlickback
    • +1
      APimpNamedSlickback  
    • Ricky84:

      Nice Ricky84
      I usually agree to build your own. Its not hard and much cheaper. But, I did find a nice pre-built system that only cost $50 more than piecing it all together myself. At that price diff it was worth it to buy it per-built. IMO. BTW I'm talkin PC not MAC

    • 1 year ago
  • Saladin
  • Incredulous
  • Naumadd
    • 0
      Naumadd  
    • Saladin:

      It's rather funny that avoiding taxation is now considered more evil than taxation itself. Not so funny that so many in the U.S. have forgotten the main gripe of our revolution - taxation.

      Do we need another to put people in the right mindset, or shall we remain sheep to government's insatiable desire for more money and more power?

    • 1 year ago
  • artemis6
  • Incredulous
    • +2
      Incredulous  
    • artemis6:

      Absolutely agree artemis6, but KB and I were discussing how hard it is to boycott a company that consistently builds products that you know you can rely on. Will keep the apple products I currently have, but will not buy any new ones as long as these sort of labor issues persist.

      Interestingly, apple uses only intel processors. intel started out in New Mexico, and still builds the best. A lot of companies are replacing intel processors with a cheaper make/model, probably also built in China. I wonder if intel still builds their products in New Mexico, or if they have moved operations to China too.....guess I'll have to look around and see if I can find out.

    • 1 year ago
  • artemis6
  • Naumadd
    • +1
      Naumadd  
    • artemis6:

      Sure, you do that sport, but when are you going to boycott the runaway government enforcing the taxation in the first place?

      P.S. You do know it is government that provides the loopholes that corporations like Apple take advantage of, yes? Why is it Apple that's evil and not the government that created the loopholes in the first place?

      Loopholes exist for very good reasons.

    • 1 year ago
  • Incredulous
    • +5
      Incredulous  
    • Image

    • and for Apple, it doesn't stop with tax evasion....

      Workers at Apple Contractor Threaten Suicide in Wage Dispute:

      Workers at a factory owned by Foxconn, Apple's main manufacturer, threatened to jump off the roof of a building in a protest about wages, a month after the two firms reached agreement on improving working conditions.

      The protest happened in the central China city of Wuhan.

      It involved 200 workers, the Hong-Kong based activist group Information Centre for Human Rights said.

      A company spokesman said the dispute, which concerned workplace adjustments and involved new workers, had been settled. He said it was not a strike. The company employs 1.2 million workers in China.

      "The dispute has already been settled after some negotiations involving the human resources and legal departments as well as the local government," the Taipei-based spokesman, Simon Tsing, said.

      Foxconn, China's largest private-sector employer, and Apple agreed to tackle violations of working conditions and improve working environments.

      The deal was agreed almost two years after a series of worker suicides at Foxconn plants focused attention on conditions at Chinese factories and sparked criticism that Apple's products were made by Chinese workers subjected to mistreatment.

      On Tuesday Apple reported that its fiscal second-quarter net income almost doubled after a jump in iPhone sales, exceeding financial market expectations.

      Tsing declined to say how many employees were involved in the latest dispute. He said no one had jumped off any building.

      The Information Centre for Human Rights said one of the complaints of the workers was that they earned less in Wuhan than they had in their previous jobs. They returned to work after police intervened, it said.

      Global protests against Apple rose after reports spread in 2010 of a string of suicides at Foxconn plants in southern China. Apple agreed to an investigation by the independent Fair Labour Association to stem criticism that its products were built in sweatshop-like conditions.

      The 159 million migrant workforce saw an average salary increase in 2011 of 21.2%, the National Bureau of Statistics said.

      http://www.guardian.co.uk/world/2012/apr/27/apple-contractor-workers-threaten-su...

    • 1 year ago
  • youngdebater
  • Incredulous
  • youngdebater
  • Incredulous
  • Paratus
    • +1
      Paratus  
    • Incredulous:

      "...and for Apple, it doesn't stop with tax evasion...."

      It is not tax evasion to complete your return within the IRS code and owe zero or minimal tax. It is tax evasion if something is done illegally regarding income or expense reporting.

    • 1 year ago
  • Incredulous
    • -1
      Incredulous  
    • Paratus:

      evasion:

      1. The action of evading something.
      2. An indirect answer; a prevaricating excuse.

      In this, and the majority of corpotocracy cases, the evasion is realized in the act of manipulating both Congress and the tax code to redefine legal in terms of what is best for the corporation, not the country....still evasion.

    • 1 year ago
  • Paratus
    • 0
      Paratus  
    • Image
    • Incredulous:

      From dictionary.com

      e·vade   /ɪˈveɪd/ Show Spelled [ih-veyd] Show IPA verb, e·vad·ed, e·vad·ing.
      verb (used with object)
      1. to escape from by trickery or cleverness: to evade one's pursuers.
      2. to get around by trickery: to evade rules.
      3. to avoid doing or fulfilling: to evade an obligation.
      4. to avoid answering directly: to evade a question.
      5. to elude; escape: The solution evaded him

      Apple did not manipulate Congress and the tax code. They prepared the return based on the rules in existence at the time and over the last few years. They have avoided tax but not evaded. Had they not reported income they were required to or reported expenses that did not occur that would be evasion. There is nothing wrong with avoiding tax. Congress set the rules and Apple prepared the return per the rules. Why do I think that? Large corporations have a contingent of IRS auditors on premises year round because the return is too big to audit all at once.
      You may refer to what Apple does as evasion but you are incorrect.

    • 1 year ago
  • Naumadd
    • 0
      Naumadd  
    • Incredulous:

      Is it not evasion for the american voter to deny any responsibility for installing government after government that imposes taxation? If you don't want taxation, stop voting for governments that tax the hell out of you and everyone else.

      You asked for it, after all. More power to Apple and anyone else who can legally avoid paying taxes. Let's beat up on government and its perpetual growth and hunger for more - not companies that actually fuel the economy and provide the high standard of living most Americans enjoy.

    • 1 year ago
  • KB723
  • Incredulous
  • KB723
  • Incredulous
  • KB723
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