Congressional panel: Apple avoided billions in US taxes with global workarounds

"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 surprised experts, a Congressional investigation has found." An extensive investigation in the New York Times today.


  1. Another big company avoids taxes, it’s legal when they do it.  This is Boingworthy how?

      1.  I rather like the recent one where Tyrian threatens Joffery with removal of his nether regions.

    1. It’s not legal.  It’s just not illegal because the activities are so complex and cover so many jurisdictions that, looking at the tax world like a wormery, if you can analyse how all the tunnels connect, you can pass money through them to avoid touching the sides at any given point in time.

      It’s somewhat disgusting given that Apple is kind of the people’s choice.

  2. Apple avoiding paying billions in taxes…public outrage.
    Apple announces iPhone 6….SHUT UP AND TAKE MY MONEY!

    1.  That’s been true for the last few devices but this time I doubt Apple has anything up it’s sleeve to make people salivate. I think the only folks Apple’s going to get to line up at 3AM for a charging pad are fanboys and those already imprisoned in it’s iGarden.

      1. Funny fact: You don’t get rich from a couple of thousands fans lining up at 3:00 to spend a few hundred bucks. At best, you get some free publicity.  

        You get rich from millions who purchase your stuff at a later date.

        Money earned   3:00 isn’t worth more than money earned at 15:00.

  3. In other news the Congressional Panel put out an informative flyer to the rest of Congress on the best methods for moving their own tax burden around.

  4. (Later, following Tim Cook’s first appearance in congress with rings on all fingers and an arbitrary number of kids who could have been his) Cook promised to make the RNC’s G4 eMac ‘scream’ and introduced that if pending changes to filings were allowed, the iPong Tennis Partner’s receipt would show a price of US$72,000, a customer price of $700, and in lieu of a ‘you saved’ line, an explanation of what a tax mule should expect.  

    1. No, it isn’t. As fair as I know they do not even play the „transfer IP to a offshore subsidiary and have the home office pay licenses“-game.

  5. Why should Apple pay US taxes on overseas income?  *None* of this revenue was forked over by Americans, and yet somehow the public expects a healthy portion of it?

    1. Why should I pay US taxes on overseas income? Because I am a US ex-pat living abroad and it’s required of me. But, I’m just a working stiff and not a mega corp who can afford to find ways to avoid it. The US is one of the few countries that taxes your income no matter where in the world you live and work.

    2. Because Apple’s foreign holdings have been created for the sole purpose of avoiding US taxes?

      Their actions (while not specifically illegal) are siphoning money away from the US economy (borrowing money at historically low interest rates, then using overseas cash to pay back the loan so that you can not only avoid the taxes that bringing your money stateside would have incurred, but also claim the money as a loss since it was used to pay back a loan).

      Of course they should be made to pay their fair share!

  6. Sensationalist bullcrap. Just like any person is free to move to a country with better laws so can any company. Now, beyond the absolute hypocrisy of investigating the business of a company that is bringing 6 billion $ to your economy (which it could easily not by moving entirely to a low tax jurisdiction), we have to look at the actual tax implications. Now, I’m not an Apple fan at all but it must be admitted that multinationals bring loads to a country, beyond the taxes they are obligated to pay. 

    All in all this is hardly news and it jumps to some conclusions that simply aren’t true (such as the implication that Apple isn’t paying any taxes on income by shifting it from place to place). Also, it’s made by someone who obviously doesn’t understand taxes.

    What Apple is doing is completely correct: they’re processing online sales in a tax haven and shipping them directly to the country of the beneficiary. Thus, they pay nothing as income taxes there since that country is ok with them coordinating sales from that location. So, where is the outrage? It’s in the governments of the countries which feel they are entitled to part of that income just because they allowed that company to exist.

    I’m tired of ranting on this, but it’s bad news reporting. 

    1. Yes, yes, yes.

      The thing is, it’s not “legal” in that the intention of the lawmakers was to allow this kind of thing.  It’s just not “illegal” because there is no co-ordinated structure of tax laws internationally, which will never come about, especially while countries like Singapore and Luxembourg determine that they can make tons of cash by hosting companies, in full knowledge that they won’t be paying tax on the amounts they’re expected to pay in the nations they’re expected to pay it.

      It’s bad form.  Not that I think governments spend money well in the slightest, but these firms could at least spend the money in useful ways in the appropriate locations.

      1. Oh yes, Singapore and Luxembourg, well knows hell-holes where people die because they can’t pay their medical bills.

        1. Not sure I understand your point, apologies – please could you expand / clarify?

          As a firm looking for ways out of paying tax, you need two things:
          (1) Low taxes in your host on your money flows
          (2) High long-term confidence the money won’t be appropriated by the state
          Many, many places give the first.  Very few offer the second.  When the two combine, they know perfectly well they are vilified in that respect by other nations.

          NB you don’t want to be a divorced estranged mother in Singapore.  There is zero safety net.

          1. I was referring to the  part „Not that I think governments spend money well in the slightest, but these firms could at least spend the money in useful ways in the appropriate locations.“

          2. Ah, I wasn’t clear.

            In essence, Apple should plough cash back into the economies where they operate.

            Singapore – sales tax, as a quid pro quo for doing business there.  I don’t think they deserve it insofar as they didn’t create Apple, but to sell to their citizenry, expect to pay a price

            USA – pay appropriately, after all, the USA is the petri dish it grew in.  No USA, no Apple.

          3. No France, No USA, therefore no Apple. That’s why Apple should pay more tax in France. 

            Also, you already mentioned doing sales tax.   It’s 19% in Germany,  15% (for Hardware) in Luxembough. Looks like tax to me.

          4. No France, no USA?  No USA, no France.  Check out the authors of both constitutions.

            You can’t stretch these things too thinly.

            The sales tax point is … correct, which is what I wrote.  If you want to sell your stuff in my city, if you don’t agree to hand me 15% of the revenues, you’re not getting past the moat.

          5. Actually, France already existed back than as an independent nation state.  It just changed governments as couple of times.

            About the sales tax: Congress isn’t bitching about Apple not paying sales tax in America, but about Apple not paying tax for stuff made in China and sold outside the USA. 

            Hey, I’m all for stricter tax laws and financial regulation. Come to think of it, we’ve been asking that for years from Washington and London, and all we’ve got was „no way“.  

            So I’m not exactly teary-eyed when the same shit hits home. 

            Also, if Congress would give up on his nasty war habit, there’d be plenty of cash to go around.

  7. Now we know why Apple has been holding on to its cash pile.

    CEO:  Spend it
    Risk Office:  Keep it

    Is there a statute of limitations on tax bills?

  8. Oh, and this kind of thing is bad because:  Governments need money.  If they can’t get it from corporations, they take it from the masses.

    And they’re not well known for finessing the impact on individuals.  Because of the status of my family, this year my effective tax went up by 1/6th due to a policy change.

    The only solution, obviously, is to build a massive holding of shares in a firm that will distribute the money to me rather than the population as a whole.

    But maaaybe that grates on my conscience.

  9. Well, Congress wrote ALL the tax laws that allow this – what is wrong with a successful company following those laws?  More unintended consequences – and then the congresscritters who wrote the laws haul the corporate bigwigs in and scold them for doing WHAT CONGRESS ALLOWS THEM TO DO!

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