Apple paid only 2 pct tax on earnings outside US (Update)

Nov 04, 2012 by The Associated Press
In this Friday, Nov. 2, 2012, photo, customers wait in the Apple store in Hong Kong to buy Apple's iPad Mini. Apple Inc. paid a rate of only 1.9 percent income tax on its earnings outside the U.S. in its latest fiscal year, a regulatory filing by the company shows. The world's most valuable company paid $713 million in tax on foreign earnings of $36.8 billion in the fiscal year ended Sept. 29, according to the financial statement filed on Oct. 31. (AP Photo/Vincent Yu)

Apple Inc. paid an income tax rate of only 1.9 percent on its earnings outside the U.S. in its latest fiscal year, a regulatory filing by the company shows.

The world's most valuable company paid $713 million in tax on foreign earnings of $36.8 billion in the fiscal year ended Sept. 29, according to the financial statement filed on Oct. 31. The foreign earnings were up 53 percent from fiscal 2011, when Apple earned $24 billion outside the U.S. and paid income tax of 2.5 percent on it.

The tech giant's foreign tax rate compares with the general U.S. corporate tax rate of 35 percent.

Apple may pay some income taxes on its profit to the country in which it sells its products, but it minimizes them by using various accounting moves to shift profits to countries with low tax rates. For example the strategy known as "Double Irish With a Dutch Sandwich," routes profits through Irish and Dutch subsidiaries and then to the Caribbean.

In this Friday, Nov. 2, 2012, file photo, a staff member of Apple Inc. hands a iPad Mini to a customer in Hong Kong. Apple Inc. paid a rate of only 1.9 percent income tax on its earnings outside the U.S. in its latest fiscal year, a regulatory filing by the company shows. The world's most valuable company paid $713 million in tax on foreign earnings of $36.8 billion in the fiscal year ended Sept. 29, according to the financial statement filed on Oct. 31. (AP Photo/Vincent Yu)

Other multinational corporations also use such tax techniques, which are legal.

Like other big companies, Apple leaves cash overseas. If it brought it home to the U.S., it would have to pay U.S. corporate taxes on the money. The cash that Apple has left overseas as of Sept. 29 has mounted to a stunning $82.6 billion, up from $74 billion as of June 30.

Where Apple does differ from other companies is that it sets aside a portion of the foreign profits, marking them as subject to U.S. taxes sometime in the future.

When Apple reports quarterly results, it records that portion of the taxes as a liability, which is subtracted from its profits even though it hasn't actually paid the taxes.

Tax experts say the company could easily eliminate these "phantom" tax obligations. That would boost Apple's profits for the past three years by as much $10.5 billion, according to calculations by The Associated Press reported in July.

While investors might rejoice if Apple suddenly added $10.5 billion to its profits, unilaterally erasing a massive U.S. tax obligation could tarnish its reputation as a relatively responsible payer of U.S. taxes. Instead, the company is lobbying to change U.S. law so that it can erase its liabilities in a less conspicuous fashion.

Overall Cupertino, California-based Apple had net income of $41.7 billion, or $44.15 per share, in fiscal 2012. That was up 61 percent from $25.9 billion, or $27.68 per share, in fiscal 2011.

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Noumenon
4.2 / 5 (59) Nov 04, 2012
PhysOrg, stop feeding the hate-Apple trolls.

Apple's corporate leaders are Required to do this, in finding legal and fiscally efficient means of operating the company, and are meeting its obligations to its stock holders. No company has voluntarily arranged to pay more in taxes than they could otherwise have done.

Obama's buddy, Imelt, CEO of G.E, did like wise in 2010, paying nearly zero on $14 billion income.

America has one of the highest corporate tax rates in the world. Lower the corporate tax rate and plug the loop holes.
Husky
5 / 5 (5) Nov 04, 2012
well if its legal then what is the big deal, google does it, everybody else with really big piles of cash does it, paying tax is for the working class.
kochevnik
4.4 / 5 (7) Nov 04, 2012
But then who will pay for your war on Islam and liberals, Noumenon? Not giving all your earnings to the war effort is a threat to national security.
Noumenon
4.4 / 5 (56) Nov 04, 2012
War on Islam? What on earth are you talking about?

I just said, "plug the loop holes".
John_balls
4.3 / 5 (6) Nov 04, 2012
Apple does not pay a 35% tax rate in the U.S. due to loopholes so big you can drive a cruise ship through them. This has been a right wing lie about corporate tax rates in the u.s. for so long.
John_balls
4.3 / 5 (6) Nov 04, 2012
PhysOrg, stop feeding the hate-Apple trolls.

Apple's corporate leaders are Required to do this, in finding legal and fiscally efficient means of operating the company, and are meeting its obligations to its stock holders. No company has voluntarily arranged to pay more in taxes than they could otherwise have done.

Obama's buddy, Imelt, CEO of G.E, did like wise in 2010, paying nearly zero on $14 billion income.

America has one of the highest corporate tax rates in the world. Lower the corporate tax rate and plug the loop holes.


Who cares what the tax rate is on paper when you don't have to pay it. So in essence it's not high at all.
Noumenon
4.2 / 5 (56) Nov 04, 2012
Because, that is why companies seek loop holes,... and is why I stated,...

America has one of the highest corporate tax rates in the world. Lower the corporate tax rate and plug the loop holes.
lengould100
3 / 5 (3) Nov 04, 2012
The US should do like every other country, and eliminate corporate taxes on corporate foreign earnings, taxing only earnings earned within its borders (at a much lower rate, 15% as in Canada). But then of course US would loose its historic "advantage of empire" wherein it taxes corporate foreign earnings to benefit its citizens. Also worth eliminating such dumb "tax shelter states" (eg. Delaware) ridiculously deliberate tax loopholes.
Jayman
3.7 / 5 (3) Nov 05, 2012
I wonder if Apple qualifies for the title of the 'evil' corporate - like in the James Bond films.
VendicarD
3.6 / 5 (9) Nov 05, 2012
With 16.5 trillion in Federal debt, clearly personal income taxes in America are way too low.

Borrow and spend Republicans are to blame for this.

"America has one of the highest corporate tax rates in the world. Lower the corporate tax rate and plug the loop holes." - NumenTard

Noumenon
4.2 / 5 (56) Nov 05, 2012
With 16.5 trillion in Federal debt, clearly personal income taxes in America are way too low.

Borrow and spend Republicans are to blame for this.

"America has one of the highest corporate tax rates in the world. Lower the corporate tax rate and plug the loop holes." - NumenTard



Again you prove that you're are dishonest, or have succumbed to leftist propaganda into cluelessness .

While its true that the Bush admin spent way too much and thus was not ideally representitive of conservatives, Obama added ONE THIRD to the current debt, with projections to have DOUBLED it by 2021.

The problem is not tax revenue , it's government spending on entitlement programs,.. progressive liberal big gov mentality, by it's nature spends to devalue the dollar as a means of redistribution of wealth.
Pressure2
3 / 5 (2) Nov 05, 2012
High corporate income tax rates in the US is mostly just a myth. Just like Apple these global companies transfer pofits overseas and loses back to the US by way of "inter-company" pricing policies.

"The truth is that while the 35% corporate income tax rate is high indeed, the creativity and global reach of U.S. corporations make them among the most lightly levied.
Between 2000 and 2005, U.S. corporate taxes amounted to 2.2% of the GDP. The average for the 30 mostly rich member countries of the Organization for Economic Cooperation and Development was 3.4%."

http://www.smartm...g-22463/
John_balls
5 / 5 (5) Nov 05, 2012
With 16.5 trillion in Federal debt, clearly personal income taxes in America are way too low.

Borrow and spend Republicans are to blame for this.

"America has one of the highest corporate tax rates in the world. Lower the corporate tax rate and plug the loop holes." - NumenTard



Again you prove that you're are dishonest, or have succumbed to leftist propaganda into cluelessness .

While its true that the Bush admin spent way too much and thus was not ideally representitive of conservatives, Obama added ONE THIRD to the current debt, with projections to have DOUBLED it by 2021.

The problem is not tax revenue , it's government spending on entitlement programs,.. progressive liberal big gov mentality, by it's nature spends to devalue the dollar as a means of redistribution of wealth.


Yes, that government spending on the military industrial complex is way out of wack to the tune of more then rest of the worlds combined.
ValeriaT
2.3 / 5 (3) Nov 05, 2012
Apple's corporate leaders are Required to do this, in finding legal and fiscally efficient means of operating the company, and are meeting its obligations to its stock holders
Why the government should tolerate the stealing of tax payers money with some private shareholders? The money which will not be returned into USA with tax will remain in China, Korea and another countries outside the USA. Is USA national debt already too low for to allow such a luxury?
ValeriaT
2.3 / 5 (3) Nov 05, 2012
its true that the Bush admin spent way too much and thus was not ideally representitive of conservatives, Obama added ONE THIRD to the current debt
In sanitation of financial crisis initiated with Bush administrative, i.e. in sanitation of additional hidden debt leaved with adventurous conservative government. The Americans are just paying for Iraq war with it - is it so difficult to realize it? Every war is extremely costly expedition.
IronhorseA
2.3 / 5 (3) Nov 10, 2012


Again you prove that you're are dishonest, or have succumbed to leftist propaganda into cluelessness .

While its true that the Bush admin spent way too much and thus was not ideally representitive of conservatives, Obama added ONE THIRD to the current debt,...


In Reagan's first 2 budgets the national debt went from 700 billion to over 1 trillion (american trillion ;P) increasing the debt by alomst 50 percent.

The political ads by Romney on the other hand complained about raising the debt from 10 trillion to 15 trillion over 4 years. So basically he was complaining that Obama didn't increase the debt fast enough ;P
VendicarD
4 / 5 (4) Nov 10, 2012
Actually, it is perfectly representative of Conservatives.

"While its true that the Bush admin spent way too much and thus was not ideally representitive of conservatives" - NumenTard

Consider the immortal words of Republican Dick Cheney.

"Reagan proved that deficits don't matter." - Dick Cheney.

Or how about this statement from a Reagan era economic advisor...

"Borrowing a trillion dollars plus was the greatest thing we ever did."

Or how about statements like this from Conservative Blowhard Rush Limbaugh.

"The deficit has never been lower."

"This business about the debt is just jealousy by the liberal elite who didn't have the guts to do it themselves. There is no federal debt problem in this country."

"Obama added ONE THIRD to the current debt, with projections to have DOUBLED it by 2021." - NumenTard

Keeping the Economy out of a 30 year long Grand Economic Depression caused by Bush.

VendicarD
3.7 / 5 (3) Nov 10, 2012
The following graph is not recent but you can see how the debt ballooned under Republican presidents and decreased under Clinton.

The massive deficits of the last 4 years are of course a direct result of the massive fiscal mismanagement of the Bush Administration that drove the U.S. economy into the ground.

U.S. national debt corrected for inflation.

http://www.brilli...tion.gif

VendicarD
4.3 / 5 (6) Nov 10, 2012
Here is a nice and truthful commentary on the failure of the Reagan Administration.

http://www.youtub...ePD_Hi_w

http://www.youtub...=related

Reagan inherited a debt of under 1 trillion and converted it to a deficit of 3 trillion.

That act habituated the U.S. economy on deficit spending.
VendicarD
4.3 / 5 (6) Nov 10, 2012
Here is what a Nobel winning Economist has to say about America's failed experiment in Libertarian/Randite Economics.

http://www.youtub...amp;NR=1

Not all Republicans are completely detached from reality.

This one seems to have a good handle on how the Repubicans are out to destroy their country.

http://www.youtub...e=relmfu
kochevnik
2.3 / 5 (3) Nov 10, 2012
Every war is expensive.
Not for the insiders. They replace all domestic industry with their own. The taxpayers fund the destruction and the US invaders gain ownership and riches. It's just another wealth transfer mechanism.