Apple CEO, Tim Cook recently testified at a senate hearing about the company’s tax avoidance practices during which he and other experts were questioned about tax “gimmickry”.
A report about this matter has been published that details Apple’s clever strategies in avoiding paying tax. According to Business Insider, the report published by the Permanent Subcommittee on Investigations shows how Apple “uses a variety of offshore structures and arrangements to shift billions of dollars from the United States to Ireland” using its primary offshore holding company Apple Operations International (AOI).
A key quote from the report explains why AOI exists: Apple explained that, although AOI has been incorporated in Ireland since 1980, it has not declared a tax residency in Ireland or any other country and so has not paid any corporate income tax to any national government in the past 5 years. Apple has exploited a difference between Irish and U.S. tax residency rules… Apple explained that, although AOI is incorporated in Ireland, it is not tax resident in Ireland…Apple also maintained that, because AOI was not incorporated in the United States, AOI is not a U.S. tax resident under U.S. tax law either.
Apple Sales International (ASI) is a second Irish affiliate and is the repository for all of Apple’s offshore intellectual property rights and pays very little in global taxes.
Apple has also avoided paying taxes over 2011 and 2012 using these arrangements: