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article imageApple paid 2% tax on $37 billion profits using legal tax schemes

By Armando Tamayo     Nov 5, 2012 in Business
Apple paid just less than 2% of income tax from its foreign profits in the latest fiscal year, as shown in the tech company's US regulatory filing recently.
The world's most profitable and valued company paid $713 million (1.9 percent) from pre-tax earnings outside the U.S. worth $36.8 billion in the fiscal year of 2011, ending in Sept. 29. Apple filed the financial statement on Oct. 31. The company paid 2.5 income tax rates from the previous year. The average U.S corporate tax rate is 35% when compared to Apple's foreign tax rates as noted in a report for Business Insider.
The BI report noted how the tech giant minimizes its income taxes from the country where it sells iPads and iPhones, by using evasive and shifty accounting procedures where it slips company profits to countries with lower income tax rates.
A quote from Boston Globe calls the strategy "... Double Irish with a Dutch Sandwich - where it routes the profits through Irish and Dutch subsidiaries and then to the Caribbean.".
Apple manages to route most of its business earnings in Europe through an auxiliary in Ireland which has lower tax rates 12.5% than Britain's 24% as reported in a BBC news story.
Other multinational companies like Google, Starbucks and Facebook similarly adopt tax moves considered to be legal, where they pay low overseas tax rates from high profits. Caribbean Islands are a well known tax shelter for giant corporations who wish to go under the official tax rates set by the U.S government.
Apple, like other big companies, leaves their cash outside the U.S., since they would have to pay higher corporate taxes if they bring their earnings to the country. Apple has left $82.6 billion earnings overseas as of Sept. 29.
More about Apple, Apple inc, Income tax, foreign tax, corporate tax
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