Apple Tax Rate Is Just Two Percent Outside US

Apple paid just two percent in corporation tax outside the US, according to a filing made with the US Securities and Exchange Commission (SEC).

The iPhone manufacturer becomes the latest company to be exposed as paying low rates of overseas tax, joining the likes of Starbucks, Ikea and a number of other technology companies.

There is no suggestion that any of the methods employed by Apple are illegal and many multinational companies are able to pay below official corporation tax rates by using tax havens.

Apple tax arrangements questioned

According to page 61 of Apple’s form 10-K filing, a form used to summarise the performance of public companies, the company paid $713 million (£445m) in the year leading up to 29 September on foreign pre-tax profits of $36.8 billion. Last year Apple paid a rate of 2.5 percent on its foreign profits.

Much of Apple’s business in Europe goes through a subsidiary in the Republic of Ireland, which levies a lower rate of corporation tax than the UK, around half the 24 percent charged in the UK. It should be noted however that Apple still pays other taxes in the UK, such as national insurance, and generates VAT for the treasury.

Apple had not responded to requests for comment at the time of writing.

Facebook reportedly pays tax on just 11 percent of its sales in the UK by running its UK operations as a subsidiary of its Dublin office. It apparently paid just £195,890 to the treasury in 2011, despite making an estimate £175 million in the country. This is less than the £275,000-a-head staffing costs of its 90 UK employees.

Ebay has also been implicated, with the Sunday Times suggesting that it paid just £1.2 million in corporation tax on the £789 million profit it posted in the UK in 2010.

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