The Gary Null Blog

Apple looks downright patriotic next to master tax dodgers like General Electric and Boeing, but it still pays far less than it should.

Chuck Collins

May 31, 2011

http://www.alternet.org/economy/151140/ihate_corporate_tax_dodgers%3A_how_apple_avoids_paying_its_fair_share/

So I was disappointed to learn that Apple is a tax dodger.

Sure, Apple pays some U.S. corporate income taxes. It looks downright patriotic next to master tax dodgers like General Electric and Boeing that have paid zero U.S. taxes for years. But Apple pays far less than it should.

Here's how: Apple shifts patents and intellectual property, which are among its biggest assets, to subsidiaries in other countries that are low- and no-tax havens. These include Ireland and the Netherlands, which have especially favorable tax rates on royalties from intellectual property.

When Apple sells an iPad or a MacBook, it allocates a portion of the profits to the offshore subsidiary that owns the patent. This tax dodge is sometimes referred to as the “Irish Two Step” or the “Dutch Sandwich.” But for Apple, we should call it the “Offshore Tax Haven Shuffle.”