Apple has various streams of revenue. Its major stream being hardware sales. Its second largest stream of income is “Services,” and other smaller programs it offers. This is how Apple makes money. Global tax laws indicate that tac should be paid where the product or service is bought. For example, if Apple sells an iPhone in Ireland, it pays Irish taxes. However, Apple avoids these taxes by dedicating resources to finding loopholes in tax laws and employing those strategies to evade taxes and maximize its profits. Like mentioned before, Apple makes money off Hardware sales and Services. In terms of “Hardware sales,” Apple sales iPhone, Mac, iPad, and smaller hardware products categories, which Apple does not disclose specific numbers. With
…show more content…
According to The New York Times, Apple holds various strategies to minimize the amount of taxes it pays: “Apple originated a tax minimization strategy called ‘Double Irish with a Dutch Sandwich,’ which decreases taxation by transferring earnings into Irish and Dutch subsidiaries and, finally, to affiliated companies located in the Caribbean.” It stands to reason that Apple intentionally opened these off-shore companies to cache its profits and avoid the high 35-percent corporate tax of America. Furthermore, a clear motive is shown because Apple targets sales of countries with lower taxation. Additionally, The New York Times also reports that “. . . though 54 percent of Apple’s long-term assets, 69 percent of its retail stores, and 34 percent of its sales are in the United States, Apple’s accountants have found legal ways to allocate about 70 percent of its profits overseas . . .” (“Apple’s Strategies for Global Tax Minimization”). Experts agree that Apple is strategically trying to avoid taxes—globally, not just in the United States. Apple could be hindering Americans and the citizens of other nations. It is obvious Apple makes most of its profits in the United States. However, this income is never subject to America’s 35-percent corporate tax. The Irish Times explains that “[Apple quietly transfers] . . . trademarks, patent rights, and other intangible assets to offshore companies . . .” (“Apple’s Cash Mountain, how it Avoids Tax, and the Irish Link”). This is another strategy Apple uses to evade taxes. Apple is giving its invaluable patents and intangible entities to off-shore shell companies, which then the shell companies ‘rent’ it back to Apple for hefty fees. Because patents have no-set values, Apple is able to pay the shell company whatever amount it wants to transfer outside the United States. Clearly, more pressure needs to be forced upon Apple to change and improve its
According to The New York Times, Apple holds various strategies to minimize the amount of taxes it pays: “Apple originated a tax minimization strategy called ‘Double Irish with a Dutch Sandwich,’ which decreases taxation by transferring earnings into Irish and Dutch subsidiaries and, finally, to affiliated companies located in the Caribbean.” It stands to reason that Apple intentionally opened these off-shore companies to cache its profits and avoid the high 35-percent corporate tax of America. Furthermore, a clear motive is shown because Apple targets sales of countries with lower taxation. Additionally, The New York Times also reports that “. . . though 54 percent of Apple’s long-term assets, 69 percent of its retail stores, and 34 percent of its sales are in the United States, Apple’s accountants have found legal ways to allocate about 70 percent of its profits overseas . . .” (“Apple’s Strategies for Global Tax Minimization”). Experts agree that Apple is strategically trying to avoid taxes—globally, not just in the United States. Apple could be hindering Americans and the citizens of other nations. It is obvious Apple makes most of its profits in the United States. However, this income is never subject to America’s 35-percent corporate tax. The Irish Times explains that “[Apple quietly transfers] . . . trademarks, patent rights, and other intangible assets to offshore companies . . .” (“Apple’s Cash Mountain, how it Avoids Tax, and the Irish Link”). This is another strategy Apple uses to evade taxes. Apple is giving its invaluable patents and intangible entities to off-shore shell companies, which then the shell companies ‘rent’ it back to Apple for hefty fees. Because patents have no-set values, Apple is able to pay the shell company whatever amount it wants to transfer outside the United States. Clearly, more pressure needs to be forced upon Apple to change and improve its