Essay on Use Of Tax Havens As A Business Motive

1151 Words Sep 27th, 2016 5 Pages
The use of tax havens as a business motive to reduce tax liability has long been a tradition for many MNCs (Fisher 2014, p338). Recently, Apple Inc. has received worldwide attention for its tax avoidance behaviour. For instance, the Australian Taxation Office (ATO) has made an inquiry regarding Apple’s 85 million dollars income tax payment in 2015, even though the company made nearly 8 billion dollars in local revenue (Khadem 2016a). This implies that the company had avoided paying its fair share of tax because Apple’s reported profits did not align with its tax figure. Additionally, in 2006, Apple had established a small office in Reno, Nevada, in order to avoid million dollars of corporate taxes in California and 20 other states (Duhigg and Kocieniewski 2012). However, the most attention has been placed on Apple for its tax avoidance in the European nations, through the widely known method of ‘Double Irish Dutch Sandwich’. This essay narrows the scope/For the purpose of this essay, I will narrow down my scope to address Apple’s legitimised goal-driven act of tax avoidance through overseas tax havens such as Ireland.
Since the 1960s, Ireland has developed a strategy to attract MNCs by offering low tax incentives (Drucker 2010, p5). In Apple’s case, the company has taken advantage of Ireland and invented the ‘Double Irish Dutch Sandwich’ method (Duhigg and Kocieniewski 2012). In the past decade, Apple has been accused of structuring its profits through Ireland to…

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