• Three cheers for Thuli

    Where are South Africa’s men and women of honour, asks Mandi Smallhorne.

  • Structure your pension

    An expert explains the ins and outs of different types of retirement annuities.

  • Inside Labour

    Without radical policy change SA's social fabric will continue to fray, says Terry Bell.

Data provided by iNet BFA
Loading...
See More

Apple evading billions in global taxes

Apr 29 2012 12:22 AFP

Related Articles

Apple enjoying fruit of China's labor

Apple rejects e-book collusion charge

Apple crushes Wall Street targets

Apple, Foxconn to revamp work conditions

Apple to refund Australian iPad buyers

Apple's labour issues

 

New York - Gadget giant Apple is avoiding billions of dollars in taxes by setting up small offices around the world to collect and invest the company's profits, The New York Times reported on Saturday.

The report said an office in Reno, Nevada, where the corporate tax rate is zero, was one of many that the California-based technology giant uses to legally sidestep state income taxes on some of its gains.

California's corporate tax rate is 8.84%.

Record sales of iPhones and iPad tablet computers, particularly in China and other parts of Asia, saw Apple report last week that it made a $39.2bn profit in the quarter ended March 31.

The Times quoted Apple executives who said the Reno office and others in Ireland, the Netherlands, Luxembourg, the British Virgin Islands and other low-tax places were among the legal methods the company was using to reduce its global tax bill.

The newspaper said Apple had "devised corporate strategies that take advantage of gaps in the tax code," citing former executives who had helped craft those policies.

In Reno, Apple uses a subsidiary named Braeburn Capital to manage and invest the gadget company's money, the report said, and when those investments succeed, the Nevada address shields the profits from being subjected to tax.

Former executive Robert Hatta, who oversaw Apple's iTunes retail marketing and sales for European markets until 2007, said routing transactions through Luxembourg allowed them to be taxed at low rates.

"We set up in Luxembourg because of the favorable taxes," Hatta told the Times.

"Downloads are different from tractors or steel because there's nothing you can touch, so it doesn't matter if your computer is in France or England. If you're buying from Luxembourg, it's a relationship with Luxembourg."

In a statement to the Times, Apple said it "has conducted all of its business with the highest of ethical standards, complying with applicable laws and accounting rules."

"We are incredibly proud of all of Apple's contributions," it said, noting that the company "pays an enormous amount of taxes, which help our local, state and federal governments."

apple
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

“Hippie sense makes business sense,” an entrepreneur said, adding that "purpose" was core to success.
 

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...