A new report issued claims that Apple use subsidiaries in Ireland and the Netherlands as part of a strategy to enable them to cut their global tax bill by billions of dollars every year.
The Associated Press issued the news today after The New York Times published information on how Apple cleverly, and legally avoid paying billions of dollars every year in federal and state taxes.
AP report “One approach highlighted in the report: Even though the company is based in California, Apple has set up a small office in Reno, Nev. to collect and invest its profits. The corporate tax rate in Nevada is zero. In California, it’s 8.84 percent.
While many major corporations try to reduce their tax bills, technology companies like Apple, Google Inc., Microsoft Corp. and others have more options to do so.
That’s because some of their revenue comes from digital products or royalties on patents, which makes it easier for them to move profits to tax-friendly states or countries, the Times said.
In contrast, it’s tougher to shift the collection of profits from the sale of a physical product – like groceries or a car – to a tax-friendly haven.”
The Times added that 71 technology companies in the S&P 500 reported paying global cash taxes over the past two years at a rate thats one third less than other S&P 500 companies.
Kitguru says: Clever management? We think so.