Apple is primarily based in U.S. where it pays substantial amounts of tax over the hefty profits it earns annually. However, it has now transpired that outside of its home town, Apple pays puny amounts of tax. To be specific, it pays a mere 2% on its overseas profits.
The figures revealed recently show that Apple’s foreign profits for the current year until September 29 had been a whopping $36.8 billion. On this huge sum, Apple paid a tax of $713 million only. That turns out of 1.9% of the overall pre-tax profits.
In U.S., where Apple is based, it has to pay a far greater amount of tax. Although the low overseas tax isn’t illegal in itself, it shows badly on the record of a company. In the past, other companies such as Facebook and Google have also been identified as paying very low taxes in non-US regions. We reported earlier how the practice is usually supported with weaker tax clauses.
During the last year, Apple paid 2.5% tax on its foreign profits. So it is interesting to note that this percentage has gone further down this year.
To pay a minimum tax on its foreign profits, Apple has strategically placed its international offices. For instance, in Europe, Britain is considered among the main hubs of business. However, it charges a corporation tax of up to 24% which is considered rather high.
Ireland, on the other hand, charges 12.5% corporation tax. And that is probably why Apple has based its Europe business in Ireland.
Source: BBC
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