Apple Sets Up Shop in Tax Havens Worldwide
Apple Inc. is reportedly circumventing huge tax bills by setting up offices in tax havens all around the world, to help avoid California’s present corporate tax rate of 8.84%, amongst others. In Reno, Nevada, the corporate tax rate is 0%, and Apple set up an office there, as well as business hubs in other light tax locales in Ireland, the Netherlands, Luxembourg and the British Virgin Islands. The small business offices help to legally offset the global tax bill by collecting and investing in Apple’s huge profits – $39.2 billion was raked in in Q4 2011.
According a former Apple exec who had a hand in creating the legal tax evasion tactics, the company had “devised corporate strategies that take advantage of gaps in the tax code.” Apple’s office in Reno is called Braeburn Capital, (perhaps the British Virgin Islands location is called something like Albermarle Pippin Investments), and invests some of the profits from Cupertino under Nevada’s tax codes, to save some funds. Robert Hatta, former iTunes retail marketing chief for Europe, states, “We set up in Luxembourg because of the favorable taxes – Downloads are different from tractors or steel because there’s nothing you can touch, so it doesn’t matter if your computer is in France or England. If you’re buying from Luxembourg, it’s a relationship with Luxembourg.”
But, so what? Apple already pays a ridiculous amount of taxes worldwide, and their efforts on getting around some of them aren’t exactly uncommon or unorthodox – Amazon has also gone through Luxembourg in the past. Still, with the world economy being all over the place, there will always be those who object to Apple looking for ways to avoid hefty tax bills.
Apple told the New York Times that the company “has conducted all of its business with the highest of ethical standards, complying with applicable laws and accounting rules – We are incredibly proud of all of Apple’s contributions,” and noted that the corporation “pays an enormous amount of taxes, which help our local, state and federal governments.”