Apple: With $35 billion we are largest taxpayer in the world
Staff Writer |
Apple presented the facts in response to reporting by the International Consortium of International Journalists.
Article continues below
"The changes Apple made to its corporate structure in 2015 were specially designed to preserve its tax payments to the United States, not to reduce its taxes anywhere else. No operations or investments were moved from Ireland.
"Far from being “untouched by the United States,” Apple pays billions of dollars in taxes to the U.S. at the statutory 35 percent rate on investment income from its overseas cash.
"Apple’s effective tax rate on foreign earnings is 21 percent — a figure easily calculated from public filings. This rate has been consistent for many years.
"Taxes for multinational companies are complex, yet a fundamental principle is recognized around the world: A company’s profits are taxed based on where value is created.
"The Organisation for Economic Co-operation and Development, Ireland, the United States and others all agree on this principle.
"1. Apple is the largest taxpayer in the world, paying over $35 billion in corporate income taxes in the last three years. Apple pays taxes in every country where we sell our products.
"When a customer buys an Apple product outside the United States, the profit is first taxed in the country where the sale takes place.
"Then Apple pays taxes to Ireland, where Apple sales and distribution activity is executed by some of the 6,000 employees working there.
"Additional tax is then also due in the U.S. when the earnings are repatriated.
"Apple’s worldwide effective tax rate is 24.6 percent, higher than average for U.S. multinationals.
"2. The vast majority of the value in Apple products is created in the United States, where design, development, engineering work and more are accomplished. So under the current international tax system, the majority of Apple taxes are owed to the U.S.
"3. Apple has cash overseas because that’s where it sells the majority of its products. Under the current tax system, post-tax earnings from foreign sales are subject to U.S. tax. Apple has earmarked more than $36 billion to cover US deferred taxes.
"This is in addition to the $35 billion the company paid in corporate income taxes over the past three years.
"4. When Ireland changed its tax laws in 2015, Apple made changes to its corporate structure to comply. Since then, all of Apple’s Irish operations have been conducted through Irish resident companies. Apple pays tax at Ireland’s statutory 12.5 percent.
"As part of these changes, Apple’s subsidiary which holds overseas cash became resident in the UK Crown dependency of Jersey, specifically to ensure that tax obligations and payments to the U.S. were not reduced.
"Since then Apple has paid billions of dollars in US tax on the investment income of this subsidiary.
"There was no tax benefit for Apple from this change and, importantly, this did not reduce Apple’s tax payments or tax liability in any country." ■