by Jason Snell
Apple’s tax haven
This is so far out of my comfort zone that I can’t even see it from here, but the New York Times wrote a piece about how Apple and other tech giants avoid taxes, based on disclosures from the new “Paradise Papers” leaks from a law firm in Bermuda.
The story focuses on Apple (it’s the biggest company in the world, so why not), but also mentions that many giant multinational corporations use shell companies in different locales to avoid paying taxes on international earnings:
Indeed, tax strategies like the ones used by Apple — as well as Amazon, Google, Starbucks and others — cost governments around the world as much as $240 billion a year in lost revenue, according to a 2015 estimate by the Organization for Economic Cooperation and Development…. In prepared statements, Allergan, Facebook, Nike and Uber said they complied with tax regulations around the world.
Apple’s response, is of course, that Apple is the world’s largest taxpayer. And that’s undoubtedly true—it’s the world’s most profitable company, after all.
The question isn’t if Apple pays taxes. The question is, is it paying its fair share? (And are all the other companies like it doing the same?)
I’d argue that it’s the responsibility of the people employed by public corporations to use every single legal option available to reduce their companies’ tax burdens. And it’s the job of governments to make sure they’re obeying the law, and to amend tax laws when necessary in order to prevent these companies from failing to pay the tax that they should.
Apple doesn’t seem to be an outlier. It’s just the biggest example of a larger trend. The European Union seems to be clamping down on Ireland’s tax laws. Apple claims it wants to repatriate its international cash, but wants the U.S. government to lower the tax rate before it does so.
Exciting stuff… if international taxation excites you. It doesn’t excite me.