About Those Tax Havens

By: ispeculatornew
Date posted: 05.21.2013 (3:00 am) | Write a Comment  (2 Comments)

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tim-cook-blog1With Apple CEO Tim Cook set to testify this week regarding tax havens and how Apple and many other companies in the US pay (a lot) less taxes than we’d expect them to pay, it will be very interesting to see what message comes out from the media. I fear it will be that Apple is evil or that we should just fix the tax loopholes. It’s not that simple. Like so many other problems, this is an incredibly tough problem to address. There are thousands of ways to avoid or diminish tax bills and global companies are finding new innovative ways every year. These methods are generally legal and do not necessarily rely on tax loopholes so solving them is not easy.

I’ve seen many smart people such as Jeffrey Sachs write about this but I still do not see many ways to do it being discussed. It’s much easier said than done.

Oh and let’s all blame Apple please.. it’s far from alone, here are others escaping the 35% corporate tax rate:

Effective tax rate

Apple = 9.8%
Google = 11.9%
Yahoo = 11.6%
Amazon = 3.5%

One article that seems to explain some of the challenges of what governments are trying to do was written on Baekdal. If you’re interested in the subject, I recommend it! It’s an incredibly complex issue and there has to be a global solution (which seems like a daunting task) if Apple and others wants to make sure it does not lose its “tax advantage” while competitors continue to get it…

Should be a very interesting debate!


Seven tax avoidance techniques used by Apple
Apple’s web of tax shelters saves it billions


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  1. Comment by The Dividend Engineer — May 21, 2013 @ 7:02 am

    Sadly or not, all multinational having global operations do it. Those having lots of intellectual property do it too. Apple and co. are not alone. There is even a Wikipedia entry of the Double Irish arrangement tax minimization scheme. It has been known for years.

    The problem with tax havens is that they have soveign jurisdiction over their tax law.

    It’s a very thorny issue. As you said, it will be a very interesting debate.

  2. Comment by IS — May 21, 2013 @ 7:27 am

    @The Dividend Engineer – Exactly yes, I’m very skeptical that the debate will be helpful, it could but it will likely be finger pointing

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