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Apple avoids tax through Ireland
Friday 31st May 2013 | Khadija
Apple has found a loophole in tax treaties enabling them to have no tax presence anywhere in the world. As one of the wealthiest companies in the US, Apple managed to avoid nearly $74 billion in taxes, over the past four years. Since dropping out of the U.S Chamber of Commerce in 2009, Apple has made $30 billion in profits through its Cork Offices in Ireland.
The Senate permanent subcommittee recently questioned Apple’s Chief Executive, Tim Cook. In regards to Apple’s tax avoidance, he testified, “We pay all the taxes we owe, every single dollar. We not only comply with the laws, but we comply with the spirit of the laws”. He further concludes stating, “We don’t depend on tax gimmicks”. The subcommittee carried out an investigation, followed by a report detailing Apple’s use of tax loopholes and subsidiaries in Ireland to minimize its global tax payments.
The US legislation calculates taxes based on where the company is incorporated whereas in Ireland taxes are based on where the company is managed and controlled. Apple’s Irish holding company, Apple’s Operations International – with no sign of operations or employees – has allowed them to evade US taxes payments, despite funds being held in New York banks. Apple is not the first to take advantage of using tax havens to cheat the system. Just last year, Google made profits by avoiding $2 billion in taxes. Seems like the rich are getting richer, whilst the rest of us are forced to pay these taxes.
Apple’s Operations International has no accounts, and has structured itself as an unlimited company to maintain privacy. AOI and other non-US based Apple companies are sitting on more than $100 billion in investments. For a company that “does not believe in gimmicks” they don’t sound too convincing, especially when their profits amount to more than Ireland’s economy.
Steve Wozniak, the co-founder of Apple, feels that Apple should pay more in taxes, as it is ethically wrong not to. During a visit to Londonderry, he argued that governments should change the tax system making it fairer for both individuals and corporations alike. Wozniak does not blame the company for their actions, but expressed that the system is to blame. I think it is time all governments take action, and hopefully the G8 summit next month shall put an end to this behaviour.
Written by Khadija Abdi
