February 11, 2017
U.S. Apple has paid only 1-6% tax on its overseas profits for more than a decade, while major countries’ corporate tax rate stood at around 20-30%, Akahata reported on February 11. According to Akahata calculations, the U.S. tech giant evaded 200 billion yen in taxes in Japan in 2015.
After releasing the first iPhone in 2007, Apple increased its overseas pre-tax profits by 10 times to nearly 50 billion dollars in 2015. However, the company paid relatively less tax to governments on those earnings from outside the U.S. Akahata pointed out that the company’s tax burden ratio for overseas profits, which was already at a low level, around 5% in the mid-2000s, decreased to 1.2% in 2010. The percentage slightly increased to 6.2% in 2015 after the company faced criticism over its dubious tax avoidance scheme.
Apple’s tax burden ratio for its overseas profits is abnormally low given that its main markets include Japan, EU, and China where effective corporate tax burden rates are all higher than 20%. The company utilizes tax havens to minimize its overall tax obligations. A U.S Senate committee report on offshore profit shifting in May 2013 revealed that Apple avoided tax payments by such means as shifting its overseas profits to its subsidiary in Ireland.
Akahata estimated how much Apple’s tax evasion efforts affected Japan’s tax revenue. According to the estimate based on the company’s annual financial reports, Apple in 2015 earned 6.7 billion dollars or 737 billion yen in profits from its sales in Japan. If Apple had been levied a tax on this estimated amount of profits procured in Japan, it should have paid a corporate tax of an additional 200 billion yen, Akahata reported.
Akahata made an inquiry to Apple Inc. and Apple Japan on this estimate, but so far has not received a response.
After releasing the first iPhone in 2007, Apple increased its overseas pre-tax profits by 10 times to nearly 50 billion dollars in 2015. However, the company paid relatively less tax to governments on those earnings from outside the U.S. Akahata pointed out that the company’s tax burden ratio for overseas profits, which was already at a low level, around 5% in the mid-2000s, decreased to 1.2% in 2010. The percentage slightly increased to 6.2% in 2015 after the company faced criticism over its dubious tax avoidance scheme.
Apple’s tax burden ratio for its overseas profits is abnormally low given that its main markets include Japan, EU, and China where effective corporate tax burden rates are all higher than 20%. The company utilizes tax havens to minimize its overall tax obligations. A U.S Senate committee report on offshore profit shifting in May 2013 revealed that Apple avoided tax payments by such means as shifting its overseas profits to its subsidiary in Ireland.
Akahata estimated how much Apple’s tax evasion efforts affected Japan’s tax revenue. According to the estimate based on the company’s annual financial reports, Apple in 2015 earned 6.7 billion dollars or 737 billion yen in profits from its sales in Japan. If Apple had been levied a tax on this estimated amount of profits procured in Japan, it should have paid a corporate tax of an additional 200 billion yen, Akahata reported.
Akahata made an inquiry to Apple Inc. and Apple Japan on this estimate, but so far has not received a response.
