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It's a bit strange to call it shifting when the profits were made overseas. And it's no surprise they'd keep it off shores once they've made it, since they'd h

It's a bit strange to call it shifting when the profits were made overseas. And it's no surprise they'd keep it off shores once they've made it, since they'd have to give up 35% of it to bring the money inside the U.S.

apress 15y ago
This is not about profits made overseas, say like selling iPhones in China This is the use of complex strategies, like creating a shell company in the Isle of man that "owns" intellectual property and "licenses" it to the US subsidiary for a fee that just happens to equal most of the profits on US sales. The profits go to the tax haven and never come back.
- tomelders 15y ago
  In this instance, to my knowledge, Apple isn't using shell companies. It has iTunes set up in Luxembourg, but that's a very real company. And each country has it's own Apple subsidiary which again are real companies in their own right. I'd say that it's hardly tax avoidance, since they pay their taxes in the countries where the revenue is generated. No one in their right mind would give up 35% of their wealth simply to move it to a different country, and nor should they.
  - ceejayoz 15y ago
    > It has iTunes set up in Luxembourg, but that's a very real company. Sure, but is it really operating out of Luxembourg? I suspect most of their employees are here in the States.
    - SoftwareMaven 15y ago
      Apple has a company here in the States and in Luxemborg. US employees are employed by the US corporation.
    - tomelders 15y ago
      Yup, they have real people employed by, and working in Luxembourg.
  - apress 15y ago
    Please go read the links. This is not about the sales happening in countries outside of the US. This is about the billions of dollars inprofits Apple, Microsoft, Google and others would otherwise be making on their US sales being shifted around to low-tax havens using clever internal licensing agreements. For example, see http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-shows-how-60-billion-u-s-revenue-lost-to-tax-loopholes.html http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-sho...

apress 15y ago

This is not about profits made overseas, say like selling iPhones in China This is the use of complex strategies, like creating a shell company in the Isle of man that "owns" intellectual property and "licenses" it to the US subsidiary for a fee that just happens to equal most of the profits on US sales. The profits go to the tax haven and never come back.

tomelders 15y ago
In this instance, to my knowledge, Apple isn't using shell companies. It has iTunes set up in Luxembourg, but that's a very real company. And each country has it's own Apple subsidiary which again are real companies in their own right. I'd say that it's hardly tax avoidance, since they pay their taxes in the countries where the revenue is generated. No one in their right mind would give up 35% of their wealth simply to move it to a different country, and nor should they.
- ceejayoz 15y ago
  > It has iTunes set up in Luxembourg, but that's a very real company. Sure, but is it really operating out of Luxembourg? I suspect most of their employees are here in the States.
  - SoftwareMaven 15y ago
    Apple has a company here in the States and in Luxemborg. US employees are employed by the US corporation.
  - tomelders 15y ago
    Yup, they have real people employed by, and working in Luxembourg.
- apress 15y ago
  Please go read the links. This is not about the sales happening in countries outside of the US. This is about the billions of dollars inprofits Apple, Microsoft, Google and others would otherwise be making on their US sales being shifted around to low-tax havens using clever internal licensing agreements. For example, see http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-shows-how-60-billion-u-s-revenue-lost-to-tax-loopholes.html http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-sho...