Apple dodges £6 billion tax bill
We are all aware that Google and Starbucks are amongst the huge list of companies that have hit the headlines through avoiding paying the fair amount of tax due. Well, Apple fanboys and girls – your favourite provider of gadgety joy has just dodged a $9.2 billion (£6 billion) tax bill.
When you’re a company as big as Apple, saving on tax payments is important as these can run in to the billions.
Fortunately for the fruity phone and puter maker, its team of accountants has just managed to save it a cool £6 billion.
This evasive action was performed through financing a $55 billion stock buyback using debt instead of offshore cash.
That means that the US government is unable to bill for tax on the deal. The bond offering, is apparently, the “biggest corporate offering on record”.
If the cash had been taken from Apple’s offshore funds — which amount to around £64 ($100) billion — the company would have had to pay a 35% tax to repatriate the money to the US. But Apple does what it can to avoid tax — and in fact it only stumps up about 1 out of every $40 in corporate income tax to the US.
Still, saying all of that, Apple is still one of the biggest corporate income tax payers in the country.
The company said last week that it would return an additional $55 billion in cash to shareholders through share repurchases and increased dividends, to compensate for a stock that’s been hammered by signs of slowing growth. In total Apple will have returned $100 billion, including past buybacks and dividends, through 2015.
The Financial Times earlier reported that Apple will avoid a potential tax bill of as much as $9 billion using the proceeds from the bond sale.
Shame it’s not paying that kind of sum into Britain’s purse too – that might be able to save our NHS, build more social housing…