Apple Named the Biggest Corporate Tax Avoider in the US
Apple officially has been dubbed the biggest corporate tax avoider in the U.S. after sending a staggering £171.6 billion (roughly $210 billion) of last year’s profits overseas. A report released by the Financial Accountability and Corporate Transparency Coalition (FACT Coalition), an alliance of more than 100 state, national, and international organizations, including Citizens for Tax Justice and the Institute on Taxation and Economic Policy (ITEP), alleged that that the tech giant was able to shave about $62 billion off its tax obligations through a plethora of convoluted offshore arrangements.
A range of other Fortune 500 companies was also implicated in the report, including Nike, which holds $10 billion offshore, as well as Goldman Sachs, which allegedly had $27 billion in foreign companies last year. The U.S. government allows corporations to keep their profits overseas and put on a hold on repatriating the funds indefinitely. Apple, specifically, has said that it will not repatriate funds unless it receives a “tax holiday” and the amount of taxes it owes is reduced.
“Every year, corporations collectively report that they have tens of billion more in cash stashed offshore than they did the year before,” said Matthew Gardner of ITEP. “The hard fact is that the U.S. tax code incentivizes tax haven abuse.”
Technically, companies are required to report the amount of money they’re keeping overseas to the U.S. Securities and Exchange Commission (SEC) to let the government know how much tax they would have paid on the profits. However, in practice, very few corporations actually do this. Instead, they exploit a tax loophole that allows companies to avoid this requirement if calculating the tax bill isn’t “practicable.”
That makes it hard to estimate how much tax revenue is being lost. However, the FACT Coalition did make an estimate, extrapolating from data available from those companies that do release the information. All in all, the report found that three-quarters of Fortune 500 companies used offshore tax havens, funneling a cumulative total of $2.42 trillion overseas and avoiding $715.62 billion in American taxes — and that number is on the rise every year.
“To put that in context, it is an amount larger than the GDP of France,” said Clark Gascoigne, the deputy director of FACT.
It doesn’t look like the U.S. will close these tax loopholes anytime soon. However, Apple’s practices have attracted scrutiny from the European commission, which ordered Ireland, the country where the company is headquartered, to collect $14.5 billion in back taxes because the company has been funneling money overseas through its Irish subsidiaries.
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