The third installment in the very insightful and popular NYT iEconomy series is front page of the Sunday NYT.
Some of the details of Apple’s corporate tax-avoidance maneuvers according to the NYT are:
• Apple’s federal tax bill was $3.3 billion on reported profits of $34.2 billion last year, a tax rate of 9.8%;
• Apple allocates 70% of its profits outside the U.S. note that the value is created in the US, but the low end manufacturing is overseas.
• A Nevada shell company let’s Apple’s U.S. business sidestep California state taxes. California corporate tax rate = 8.84%, while Nevada = 0%.
• California gives tax credits to Apple for conducting R&D in the state worht more $400 million since 1996;
• The “Double Irish With A Dutch Sandwich” routes royalties and profits through Ireland and the Netherlands and the Caribbean. On paper, Ireland “generated” one-third of Apple’s revenue last year.
• Salespeople working in high-tax countries are employed by subsidiaries in low-tax countries.
• iTunes sales “happen” in Luxembourg –– a tax dodge with local incentives. In 2011, iTunes S.à r.l.’s revenue exceeded $1 billion
The full series is Pulitzer bait, and deservedly so.
Click thru for giant graphics
How Apple Sidesteps Billions in Taxes
CHARLES DUHIGG and DAVID KOCIENIEWSKI
NYT, April 28, 2012
This post originally appeared at The Big Picture and is posted with permission.