Weekend Economists: See the Kittehs! May24-27, 2013

[Demeter]

56. Apple’s Irish Tax Strategy Explained

http://www.foxbusiness.com/government/2013/05/21/apples-irish-tax-strategy-explained/

...A new Senate report alleges that Apple (AAPL) blows through a loophole that capitalizes on the difference between U.S. and Irish rules regarding tax residency to avoid paying corporate income taxes.

The report says the move let Apple shift at least $74 billion away from the Internal Revenue Service between 2009 and 2012. The report also alleges that Apple uses shell operations in Ireland to avoid U.S. taxes.

But Apple hotly disputes that characterization. Apple says its Irish units are not “offshore operations,” but instead run a huge chunk of Apple’s global business, which the Senate report also indicates.

Apple says its international headquarters in Cork, Ireland, employs 4,000 workers. These workers are responsible for selling Apple products to consumers and businesses in Europe, the Middle East, Africa, India, Asia and the Pacific, information that is noted, too, in the Senate report.

The 4,000 workers at Apple’s base in Ireland “are engaged in manufacturing, customer service, sales support, supply chain and risk management operations and finance support services,” Apple’s testimony says.

Apple says 61% of its sales come from overseas, which is why two-thirds of its $144.7 billion in cash and equivalents is parked overseas, cash which supports growth, including things like acquisitions or opening new stores...

Read more: http://www.foxbusiness.com/government/2013/05/21/apples-irish-tax-strategy-explained/#ixzz2UJoVai00