Apple has been under heavy scrutiny the past few months for its tax practices and off-shore cash pile, but the criticism that Apple isn’t paying enough taxes isn’t likely to stop thanks to a new report that claims Apple paid zero corporate tax in the United Kingdom last year.
According to a report from the Financial Times, Apple was able to avoid paying corporate taxes in the UK last year by using tax deductions from share awards to employees that basically offset the amount of taxes Apple owed through September 2012, all of which is completely legal.
Apple reported that it’s profits from UK subsidiaries totalled £68 million before taxes, but it netted $36.3 billion of sales in Europe in 2012, $15 billion of which was operating profit. Apple also funneled money into offshoots in countries with lower-tax rates like British Virgin Islands while enjoying a 2% tax rate on overseas profits.
Tim Cook appeared before the US Senate sub-committee in May to testify of Apple’s tax practices in the U.S. Cook noted that all of Apple’s accounting practices are within the bounds of the US tax code, but the company used an Irish ghost company to avoid paying taxes on $78 billion over four years.
Source: The Financial Times
