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  • Apple Escapes The British Tax Man Again?


    Apple didn't cough up much to jolly old England in corporate taxes last year. More specifically, perhaps, it paid ZERO corporation tax in the United Kingdom in 2012.

    Although some are up in arms about the matter, Apple really doesn't have to defend itself given the presence of circumstances clearly in the company's favor (and within the letter of the law), according to a report Monday from Forbes.

    First, all iTunes sales are actually made in Luxembourg. Why? The VAT rate there is lower and one of the peculiarities of EU tax law is that “electronic services” pay VAT in the country they emanate from.

    Second, for sales outside the US, Apple apparently buys the equipment from the manufacturers in China through an Irish company. Today's explanation from Forbes indicates that the equipment is then sold to other dealers, distributors, or Apple Stores around the world. "Prices are such that the stores don’t really make much money," Forbes reports. In fact, the margins pretty much cover the actual fixed and variable costs of having stores and making sales.

    The final part is in those operating profits in the UK. The fact is that operating profits are not what are taxed: profits before tax are what are taxed. And issuing stock to the management is a part of doing business.
    If anything is clear from today's report, it's that there is arguably no company of Apple's size in the world that's better at crunching numbers and doing business in a way that benefits the bottom line to an unbelievable extent.

    Source: Forbes
    This article was originally published in forum thread: Apple Escapes The British Tax Man Again? started by Michael Essany View original post
    Comments 9 Comments
    1. *T*'s Avatar
      *T* -
      Whoever designed this saved Apple billions. I'll bet anyone here that he is not earning more than 1 million a year.
    1. bigbaba's Avatar
      bigbaba -
      I can't wait for Samsung to copy this…
    1. krusher's Avatar
      krusher -
      If Samsung doesn't, PC will.
    1. rickuk's Avatar
      rickuk -
      Shows that Apple is as bad as Google, Amazon and Starbucks when it comes to paying UK tax
    1. docmagoo2's Avatar
      docmagoo2 -
      Yeah, as a British citizen it's somewhat galling that I have to pay £1000's a year in tax and apple / google etc pay sweet bugger all. C'mon Cameron crack down on this and close the loophole
    1. MikePA's Avatar
      MikePA -
      What's your point?
    1. dsg's Avatar
      dsg -
      that our tax laws are poor and need a radical revise
    1. bigboyz's Avatar
      bigboyz -
      I agree^^. Yet, with Apple they seem to throw stock options around as they are more valuable in the end...for now that is.
    1. Albut's Avatar
      Albut -
      Tax avoiders are rouges in anyone's language! Money grabbers!