Apple Accused Of Avoiding Taxes In U.K.

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