Apple’s market capitalization is a mighty USD 730 billion on global sales of more that USD 200 billion. The company’s world-wide tax plannning has led to corporate taxation amounting to only a fraction of revenue. Books could be written about Apple’s ability to spot and exploit quite legitimate loopholes in the tax system. These notes will focus on Australia.
The Australian Financial Review’s analysis shows that while Australians have bought USD 27 billion worth of Apple products since 2002, the company has paid only USD 193 million to the Australian Tax Office – 0.7 per cent of its turnover.
The newspaper estimates that around USD 9 billion in profit has been shifted offshore to minimise taxation. “Apple worldwide in the past four years have avoided paying tax on USD 44 billion,” said Antony Ting, a senion lecturer in taxation law at Sydney University.
“If I pay $ 600 for an iPad in Australia, then $ 550 is paid to Apple Ireland and out of the $ 550, $ 220 is not taxed any- where in the world,” Dr. Ting explained. They are arranging themselves in such a way that the royalties go through Ireland to places like Bermuda where they’re not taxed.
US tax lawyer Lee Sheppard who specialises in multinational corporations, says companies are exploiting the fact that most of their products’ value rests in intellectual property. Ms Sheppard says that it is a perfectly legal way of doing business under current international tax law and corporate governance arrangements.