Apple Accused Of Avoiding Taxes In U.K.

Apple Accused Of Avoiding Taxes In U.K.

Apple's headquarters in Cork, Ireland. Nowhere near as pretty as its Cupertino campus.

Apple has been accused of avoiding paying a proper amount of taxes in the U.K. after making an incredible £6 billion in the last financial year, but paying only £10 million in tax. The Cupertino company runs what is described as a “significant operation” in Cork, Ireland, where tax rates are almost half those paid in the U.K.

British tabloid the Daily Mail reports:

Documents from one of its two main UK divisions, Apple Retail UK Ltd, show it paid tax of just £3.79million on sales of more than £500million in the year to September 2010, the latest accounts available.

Another subsidiary, Apple (UK) Ltd, paid £6.1million in tax on sales of just under £69million.

“Experts” say that Apple’s total sales in the U.K. are actually far greater, according to the report, but “many are logged elsewhere.” Revenues from Britain are estimated at around 10% of Apple’s total $63 billion revenue earned in 2010.

The company is now under scrutiny for choosing to base its operations in a country with low tax rates. At just 12.5%, the Irish corporate tax rate is just over half the 24% rate paid in the U.K.

Apple does a similar thing in the U.S., where its financial operations are run from Nevada, a state which assesses no corporate or individual income tax. And it isn’t the only company under fire, either. Google has also been scrutinized for basing its operations out of Ireland for tax purposes, and Amazon has been able to avoid taxes by switching its European headquarters to Luxembourg.

In reality, Apple is actually doing nothing wrong — it is simply taking advantage of the low corporate tax rates in the Republic of Ireland. Clearly this practice is frowned upon by the Daily Mail, but it’s perfectly legal. In fact, attracting companies like Apple is exactly why countries like Ireland have such low tax rates!

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  • danieljohansson

    Entirely agree! Apple are doing nothing wrong! They are engaging in smart business decisions. To suggest wrong doing would also point the finger at Microsoft, Intel, Facebook, Google, eBay, Oracle, soon Twitter and more who all have international HQs there. If the UK wants to be competitive it should match its neighbor. Then again we wouldn’t take the rumblings of the fascist Daily Mail too seriously.

  • 4ny0ne

    Btw, that’s an older picture of the Apple Campus there.. currently there is a white protecting roof and a blue apple logo where this ugly red triangle is placed.
    The outside of the building is ugly, yet it’s really modern an beautiful on the inside :)

  • Alfred2612

    “Apple is actually doing nothing wrong — it is simply taking advantage of the low corporate tax rates in the Republic of Ireland… it’s perfectly legal.”

    Whether something is “wrong” or not has nothing to do with whether it is legal. Cheating on your wife is perfectly legal, but few would say you’re “doing nothing wrong”.

    Apple, Amazon, Intel, and so on are doing their best to avoid paying their fair share for the education of their customers, the roads which transport their goods, and all the legal and military protections which allow an economy to flourish and deliver them business.

    So while it’s not against the law, it is being a bit of a douche.

    Ultimately the cause is the European single market. The UK cannot say “all income generated here must be taxed here” because that violates the EU single market. So the only way around the problem is to either match Ireland’s and Luxembourg’s tax rate (which won’t work as they could easily just reduce theirs again), or to leave the common market.

    Since neither will happen, Apple and Amazon and all the others can continue to get away with not paying their fair share for the roads, government, education, security, etc. which brings them business in the first place. Us ordinary citizens will just have to slave away long hours at work pay it on their behalf.

    I hope you enjoy your multi-million dollar bonus, Mr Cook. I guess I’ll just keep paying for your success out of my salary own, then.

  • Ed Steinberg

    Is this a story about something. Apple has done nothing wrong. What was the purpose of writing this article?

About the author

Killian BellKillian Bell is a freelance writer based in the UK. He has an interest in all things tech, but most enjoys covering Apple, anything mobile, and gaming. You can follow him on Twitter via @killianbell, or through his website.

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