Apple announces record profits
Apple has announced profits of $18bn in the final quarter of 2014, making Apple the biggest ever quarterly earner of any public company. The results were driven by sales of its iPhone 6, especially in China.
But ActionAid’s Tax Campaign Manager, Murray Worthy said yesterday; “The announcement by Apple today of the biggest profits in history is only part of the story; despite this news corporate secrecy means we still don’t know whether they’re paying a fair share of tax."
Apple has used loopholes to avoid tax for many years.
In May 2013, Senator John McCain told the permanent subcommittee on investigations (PSI) that "Apple's corporate tax strategy reflects a flawed corporate tax system that allows large multinational corporations to shift profits offshore to low-tax jurisdictions."
Senator McCain said that Apple had over $100bn - more than two-thirds of its total profits at that time- "stashed away in an offshore account". The PSI committee reckoned that Apple had avoided a tax payment of $9bn in 2012 alone.
By basing its European operations in Ireland, Apple made pioneering use of the "double Irish" system of tax accounting, which allowed payments between different parts of a corporate structure to shift income from a higher-tax country to a lower-tax country.
Accountant and Fair Tax Mark co-founder Richard Murphy said that Apple is "a serial tax haven user which has worked very hard to avoid tax liabilities outside the USA."
ActionAid's Murray Worthy said: “Tax dodging by multinational companies costs governments around the world including the worlds poorer countries billions of pounds every year, which should be paying for public services like healthcare and education, so its vital companies are forced to report where they make their money and how much tax they pay.
“ActionAid is part of a coalition calling for all political parties to introduce a Tax Dodging Bill to remedy this by forcing companies to publish this information as well as toughening the rules on corporate tax avoidance.
“Ahead of the election in May, the public expect politicians of all parties to do more to tackle the scandal of corporate tax dodging. If party leaders want to live up to their claims of being tough on tax dodging they should support the introduction of a Tax Dodging Bill.”
In September 2014 the European Commission opened an investigation into a deal between Apple and the Irish government that ran from 1991-2007, and which may have constituted "illegal state aid". The investigation is expected to take 18 months and could result in Apple being required to repay tax linked to billions of euros of revenue.
Check out our guide to mobile phones for alternatives to Apple's iPhones.
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