Saturday, May 25, 2024

How Apple Sidesteps Billions in Taxes

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The New York Times: Last year, Apple paid $3.3 billion in taxes on profits of $34.2 billion, for a net 9.8 percent tax rate. However, a study by former Treasury Department economist Martin A. Sullivan says the company would have paid $2.4 billion more if it hadn’t relied on a string of tactics designed to decrease its tax bill. Those tactics include operating a small office in Reno, Nevada that collects and invests company profits. If Apple performed those activities at its headquarters in Cupertino, it would have to pay California’s 8.84 percent corporate tax rate; Nevada’s corporate tax rate is zero. Apple also relies on a practice called the “Double Irish With a Dutch Sandwich,” which routes profits through Ireland, the Netherlands and the Caribbean in order to reduce the company’s taxes.

Apple maintains that it “has conducted all of its business with the highest of ethical standards, complying with applicable laws and accounting rules.” It adds, “We are incredibly proud of all of Apple’s contributions.”

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