According to an international financial statement that Apple filed, the company only paid 1.9 percent of income tax on earnings outside of the U.S. in the last fiscal year. This regulatory filing shows that Apple, the world’s most valuable company, paid $713 million in tax on foreign earnings of $36.8 billion in the fiscal year that ended on September 29.
These foreign earnings were up 53 percent from the 2011 fiscal year, where Apple earned $24 billion outside of the U.S. and paid 2.5 percent of income tax on it, according to the Associated Press, which learned the details from Apple’s 10K filing with the US Securities and Exchange Commission (SEC).
Apple’s foreign tax rate is much less when compared to the general U.S. corporate tax rate of 35 percent. Like a lot of other companies, Apple leaves money overseas. If it was brought to the U.S., Apple would have to pay the much higher U.S. corporate tax rates. The cash Apple has left overseas since September 29 has increased to $82.6 billion, up from $74 billion since June 30.
By arranging its tax payments like this, Apple isn’t breaking any laws. According to the Associated Press, the company minimizes having to pay some income taxes on its profits to the country that it sells products to by using them in a number of accounting moves to shift profits to countries with low tax rates. This is known as the “Double Irish With a Dutch Sandwich,” where companies route profits through Irish and Dutch subsidiaries and then to the Caribbean.
Overall, Apple had a net income of $41.7 billion, which is up 61 percent from $25.9 billion in the 2011 fiscal year.
Image Credit: CSR Digest
