Apple’s tax practices are back in the news. A recent study from the International Consortium of Investigative Journalists says Apple found a new location to store its overseas cash to avoid paying higher taxes. The findings, part of a leak of documents called the “Paradise Papers,” state that Apple chose the tiny island of Jersey in the English Channel to store its over $250 billion in cash. The island charges no tax on companies’ profits, ICIJ reported.
Apple put out a press release to clarify it’s tax position. Apple believes every company has a responsibility to pay its taxes, and as the largest taxpayer in the world, Apple pays every dollar it owes in every country around the world.
Apple also highlights certain inaccuracies in the reporting by the International Consortium of Investigative Journalists. Among the inaccuracies in these reports:
1) The changes Apple made to its corporate structure in 2015 were specially designed to preserve its tax payments to the United States, not to reduce its taxes anywhere else. No operations or investments were moved from Ireland.
Far from being “untouched by the United States,” Apple pays billions of dollars in taxes to the US at the statutory 35 percent rate on investment income from its overseas cash.
2) Apple’s effective tax rate on foreign earnings is 21 percent — a figure easily calculated from public filings. This rate has been consistent for many years.
Apple further included some additional facts regarding their tax exposure:
1) Apple is the largest taxpayer in the world, paying over $35 billion in corporate income taxes in the last three years.
2) Apple’s worldwide effective tax rate is 24.6 percent, higher than average for US multinationals.
3) The vast majority of the value in Apple products is created in the United States, where design, development, engineering work and more are accomplished. So under the current international tax system, the majority of Apple taxes are owed to the US.
4) Apple has cash overseas because that’s where it sells the majority of its products.
Further details on Apple’s tax position is accessible at:
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