Related: Cooking Up an Apple Post
"Apple’s vast empire shields billions from taxes" by Nelson D. Schwartz and Charles Duhigg | New York Times, May 21, 2013
WASHINGTON — Even as Apple became the nation’s most profitable technology company, it avoided billions in taxes in the United States and around the world through a web of subsidiaries so complex it spanned continents and went beyond anything most experts had ever seen, congressional investigators disclosed Monday.
Making all that much harder to get to the core.
The investigation is expected to set up a potentially explosive confrontation between a bipartisan group of lawmakers and Timothy D. Cook, Apple’s chief executive, at a public hearing Tuesday.
Congressional investigators found that some of Apple’s subsidiaries had no employees and were largely run by top officials from the company’s headquarters in Cupertino, Calif. But by officially locating the subsidiaries in places like Ireland, Apple was able to, in effect, make them stateless — exempt from taxes, record-keeping laws, and the need for the subsidiaries to even file tax returns anywhere in the world.
Apple helping bring you austerity, American?
‘‘Apple wasn’t satisfied with shifting its profits to a low-tax offshore tax haven,’’ said Senator Carl Levin of Michigan, who is chairman of the Senate Permanent Subcommittee on Investigations that is holding the public hearing Tuesday into Apple’s use of tax havens. ‘‘Apple successfully sought the holy grail of tax avoidance. It has created offshore entities holding tens of billions of dollars while claiming to be tax resident nowhere.’’
Thanks to what lawmakers called ‘‘gimmicks’’ and ‘‘schemes,’’ Apple was able to largely sidestep taxes on tens of billions of dollars it earned outside the United States in recent years. Last year, international operations accounted for 61 percent of Apple’s total revenue.
But they are such a great company.
Investigators have not accused Apple of breaking any laws, and the company is hardly the only American multinational to face scrutiny for using complex corporate structures and tax havens to sidestep taxes.
It just looks bad.
In recent months, revelations from European authorities about the tax avoidance strategies used by Google, Starbucks, and Amazon have all stirred public anger and spurred several European governments, as well as the Organization for Economic Cooperation and Development, a Paris-based research organization for the world’s richest countries, to discuss measures to close the loopholes.
Related:
Google Gets Around British Taxes
Sipping Away on a Starbucks
Blanketing the Internet With Taxes
Amazing that they want you to pay sales tax while Apple stays $hiny.
Still, the findings about Apple were remarkable both for the enormous amount of money involved and the audaciousness of the company’s assertion that its subsidiaries are beyond the reach of any taxing authority.
I'm not feeling that good.
“There is a technical term economists like to use for behavior like this,’’ said Edward Kleinbard, a law professor at the University of Southern California in Los Angeles and a former staff director at the Congressional Joint Committee on Taxation. ‘‘Unbelievable chutzpah.’’
While Apple’s strategy is unusual in its scope and effectiveness, it underscores how riddled with loopholes the American corporate tax code has become, critics say. At the same time, it shows how difficult it will be for Washington to overhaul the tax system.
Overall, Apple’s tax avoidance efforts shifted at least $74 billion from the reach of the Internal Revenue Service between 2009 and 2012, the investigators said. That cash remains offshore, but Apple, which paid more than $6 billion in taxes in the United States last year on its American operations, could still have to pay federal taxes on it if the company were to return the money to its coffers in the United States.
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Also see: Students Starved at Attleboro School
Bad apples?
NEXT DAY UPDATE:
Grilled apples for breakfast?
"Senate panel grills Apple CEO on tax tactics; Cook insists company pays all levies owed" by Marcy Gordon and Peter Svensson | Associated Press, May 22, 2013
WASHINGTON — Apple chief executive Timothy D. Cook reaffirmed Apple’s position that given the current US tax rate, it has no intention of bringing that cash back to the United States. Like other companies, it has a responsibility to shareholders to pay as little as possible in taxes.
In theory I'm all for that, and am not in favor of raising taxes; however, in the current political climate and with no alteration the the underpinnings of the economy, that looks bad.
In effect, Apple is holding out for a lower corporate tax rate, and Cook spent some of his time in the spotlight to advocate for one, accompanied by a streamlining of the tax code to eliminate deductions and credits.
Cook, who is more accustomed to commanding a stage in front of investors and techies than facing a congressional committee, took a defensive tone with his opening statement. He punched out words when stressing the 600,000 jobs that the company supports while adding that Apple is the nation’s largest corporate taxpayer....
How many immigrants are getting those H1-B's and such? It's always the $ame old arguments with these guys.
Senator Carl Levin, Democrat of Michigan, the panel’s chairman, said at the start of the hearing, ‘‘Apple is exploiting an absurdity, [a] golden goose.’’
**************
‘‘What Apple is doing is pretty mainstream,’’ said accounting specialist Robert Willens....
So that makes it all right?
Apple’s enormous, iPhone-fueled profits mean that it has more cash stashed overseas than any other company: $102 billion.
That's one hell of a goose.
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