[IMG]http://graphics8.nytimes.com/images/2012/04/29/business/29appletax/29appletax-articleLarge.jpg[/IMG]
[QUOTE][I]Braeburn Capital, an Apple subsidiary in Reno, Nev., manages and invests the company’s cash. Nevada has a corporate tax rate of zero, as opposed to the 8.84 percent levied in California, where Apple has its headquarters.[/I][/QUOTE]
[QUOTE]Yet, with a handful of employees in a small office here in Reno, Apple has done something central to its corporate strategy: it has avoided millions of dollars in taxes in California and 20 other states.
Apple’s headquarters are in Cupertino, Calif. By putting an office in Reno, just 200 miles away, to collect and invest the company’s profits, Apple sidesteps state income taxes on some of those gains.
California’s corporate tax rate is 8.84 percent. Nevada’s? Zero.
Setting up an office in Reno is just one of many legal methods Apple uses to reduce its worldwide tax bill by billions of dollars each year. As it has in Nevada, Apple has created subsidiaries in low-tax places like Ireland, the Netherlands, Luxembourg and the British Virgin Islands — some little more than a letterbox or an anonymous office — that help cut the taxes it pays around the world.
Almost every major corporation tries to minimize its taxes, of course. For Apple, the savings are especially alluring because the company’s profits are so high. Wall Street analysts predict Apple could earn up to $45.6 billion in its current fiscal year — which would be a record for any American business.
Apple serves as a window on how technology giants have taken advantage of tax codes written for an industrial age and ill suited to today’s digital economy. Some profits at companies like Apple, Google, Amazon, Hewlett-Packard and Microsoft derive not from physical goods but from royalties on intellectual property, like the patents on software that makes devices work. Other times, the products themselves are digital, like downloaded songs. It is much easier for businesses with royalties and digital products to move profits to low-tax countries than it is, say, for grocery stores or automakers. A downloaded application, unlike a car, can be sold from anywhere.
The growing digital economy presents a conundrum for lawmakers overseeing corporate taxation: although technology is now one of the nation’s largest and most valued industries, many tech companies are among the least taxed, according to government and corporate data. Over the last two years, the 71 technology companies in the Standard & Poor’s 500-stock index — including Apple, Google, Yahoo and Dell — reported paying worldwide cash taxes at a rate that, on average, was a third less than other S.& P. companies’. (Cash taxes may include payments for multiple years.)
Even among tech companies, Apple’s rates are low. And while the company has remade industries, ignited economic growth and delighted customers, it has also devised corporate strategies that take advantage of gaps in the tax code, according to former executives who helped create those strategies.
Apple, for instance, was among the first tech companies to designate overseas salespeople in high-tax countries in a manner that allowed them to sell on behalf of low-tax subsidiaries on other continents, sidestepping income taxes, according to former executives. Apple was a pioneer of an accounting technique known as the “Double Irish With a Dutch Sandwich,” which reduces taxes by routing profits through Irish subsidiaries and the Netherlands and then to the Caribbean. Today, that tactic is used by hundreds of other corporations — some of which directly imitated Apple’s methods, say accountants at those companies.
Without such tactics, Apple’s federal tax bill in the United States most likely would have been $2.4 billion higher last year, according to a recent study by a former Treasury Department economist, Martin A. Sullivan. As it stands, the company paid cash taxes of $3.3 billion around the world on its reported profits of $34.2 billion last year, a tax rate of 9.8 percent. (Apple does not disclose what portion of those payments was in the United States, or what portion is assigned to previous or future years.)
By comparison, Wal-Mart last year paid worldwide cash taxes of $5.9 billion on its booked profits of $24.4 billion, a tax rate of 24 percent, which is about average for non-tech companies.[/QUOTE]
[url]http://www.nytimes.com/2012/04/29/business/apples-tax-strategy-aims-at-low-tax-states-and-nations.html?_r=2[/url]
Like probably hundreds other companies and corporations.
[QUOTE=Awesomecaek;35759835]Like probably hundreds other companies and corporations.[/QUOTE]
But this is apple so it's 100000x worse
I think GE manages to pay no taxes at all
good thing they pass on the savings to their customers...
[QUOTE=DrLuke;35759842]But this is apple so it's 100000x worse[/QUOTE]
yup, where's faze anyways?
[quote]California’s corporate tax rate is 8.84 percent. Nevada’s? Zero.[/quote]
I'd be more surprised if they didn't use this somehow.
You don't have laws to prevent this?
Don't Google do something similar aswell?
Aren't corporations people? Why aren't they paying taxes like the people...?
Someone post this on cult of mac
things like this should be illegal for [B]every[/B] company
[QUOTE=farmatyr;35762764]You don't have laws to prevent this?[/QUOTE]
don't be silly this is america, the corporations are the government.
Reminds me of the things that Footballers/Soccer players do, create a company in their name and send all payments to that to have a corporate tax rate instead of personal one.
Boo.
[QUOTE=Lick;35763043]Someone post this on cult of mac[/QUOTE]Someone will probably say something like this:
[QUOTE=ac/14;35760484]good thing they pass on the savings to their customers...[/QUOTE]
Or something similar, or about how they need all that extra money to make the next model iPad.
It amazing how things like this happen and yet little-to-nothing will be done about it
need more outrage these days
[QUOTE=ac/14;35760484]good thing they pass on the savings to their customers...[/QUOTE]
Don't see why they have to.
But on topic there should be laws to prevent this stuff.
[QUOTE=Awesomecaek;35759835]Like probably hundreds other companies and corporations.[/QUOTE]
Though, as you'd know if you [I]read the article[/I], several modern tax avoidance methods were pioneered by Apple.
So, yeah, actually, they deserve special notice.
[QUOTE=Mechwarrior;35762968]Aren't corporations people? Why aren't they paying taxes like the people...?[/QUOTE]
They're still people, just a person who is a bunch of pieces spread out around the world for their advantage.
Like Voldemort.
Why the hell is corporation tax so low within the United States? 0% is fucking stupid.
[QUOTE=DogGunn;35764049]Why the hell is corporation tax so low within the United States? 0% is fucking stupid.[/QUOTE]
"[I]It'll trickle down![/I]"
[QUOTE=DogGunn;35764049]Why the hell is corporation tax so low within the United States? 0% is fucking stupid.[/QUOTE]Because they have a shitload of money and can buy politicians at will.
[QUOTE=Snake7;35764041]They're still people, just a person who is a bunch of pieces spread out around the world for their advantage.
Like Voldemort.[/QUOTE]
And we all know how well that worked out for him :v:
[QUOTE=DogGunn;35764049]Why the hell is corporation tax so low within the United States? 0% is fucking stupid.[/QUOTE]
Because having a negative corporate tax rate would be a little too obvious
We have company's here in the netherlands that just specialize in being post boxes and nothing else.
Foreign company's buy up a post box and then they can open up a bank account and get low dutch tax.
Meanwhile, average schmucks pay half their salary or more in taxes.
:downs:
Probably the same reason why Citigroup and Wells Fargo have a lot of offices here in South Dakota as well.
No state corporate income tax.
[QUOTE=DogGunn;35764049]Why the hell is corporation tax so low within the United States? 0% is fucking stupid.[/QUOTE]
Some people believe that no corporate tax rates increase business, which is true to a point. But then you get these giant corporations like Google, Apple, General Electric, etc., that can abuse the system like this and pay no taxes (and if I'm not mistaken, GE got a tax REFUND.)
[QUOTE=DogGunn;35764049]Why the hell is corporation tax so low within the United States? 0% is fucking stupid.[/QUOTE]
Different states have different rates, and it is to encourage business. In Wisconsin, for example, years ago they raised the rates higher than that in neighboring states, so a large portion of the business owners left, causing massive unemployment.
[QUOTE=oldeskoolfan;35765419]Some people believe that no corporate tax rates increase business, which is true to a point. But then you get these giant corporations like Google, Apple, General Electric, etc., that can abuse the system like this and pay no taxes (and if I'm not mistaken, GE got a tax REFUND.)[/QUOTE]
That logic makes sense for small businesses, but then as you said, you have large corporations reap these benefits.
Surely there must be some cap on the size of the corporation or business before the 0% corp tax is not applicable?
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