Apple accused of avoiding paying UK $700 million in taxes


Apple’s new UK headquarters is in London’s iconic Battersea Power Station



A new report from a tax watchdog claims that between Apple and other major IT firms, the UK may have lost almost $3 billion in tax revenue in 2021 alone.

Apple has long been in an ongoing dispute with the European Union over its tax arrangements in Ireland, but now a new study says it has benefited from UK tax laws too. A UK charity called TaxWatch effectively argues that the laws of Britain and other countries do not correctly account for multinational earnings.

“Current international tax rules generally work on the basis that profits are allocated based on where value is created,” its report says, “which is not necessarily the same as the location of customers.”

“Global businesses can organise the structure and activities of each of their subsidiaries to move sales, costs and thereby profits and losses between different jurisdictions,” it continues. “This enables them to leverage differences in tax rates and laws between the countries within which their subsidiaries operate.”

Calling this type of tax avoidance “profit shifting,” TaxWatch says it is “recognised as a major problem in the OECD [ Organization for Economic Cooperation and Development].”

TaxWatch then attempts to demonstrate the scale of the issue by working through the most recently available finance figures from seven large technology firms:

  • Adobe
  • Amazon
  • Apple
  • Alphabet (Google)
  • Cisco
  • Meta (Facebook)
  • Microsoft

TaxWatch is hampered by how companies, including Apple, do not necessarily report their UK revenues. It therefore stresses that its figures and conclusions are illustrative rather than precise.

“At no point do we suggest that the figures presented here are accurate and an exact answer to how much profit these companies make in the United Kingdom,” it says. “That would be impossible to determine without access to detailed figures from inside these companies, which we do not have.”

Firms were approached and those that replied “said that they paid the correct tax in all jurisdictions.”

Amazon reportedly said the charity’s “conclusions were inaccurate and based on incorrect assumptions.”

TaxWatch does, however, lay out its methodology in detail, and in the case of Apple says that it has referred to figures from the UK’s Competition and Markets Authority (CMA). The CMA estimated Apple’s 2021 turnover as between $12 billion and $18 billion, so it has based its calculations on a midpoint between those figures.

Based on this, TaxWatch estimates that Apple should have paid $863 million to the UK taxes for 2021. Instead, it reportedly paid around $163 million.

Overall, the charity claims that the seven Big Tech firms in total avoided paying almost $3 billion to the UK for 2021.

TaxWatch says that Apple did not respond to requests for comment.

Separately, figures for 2020 showed that Apple paid the UK some $8 million that year — when it made $1.8 billion in sales. At the time, Apple said that “We are very proud of our many contributions across the UK and last year spent over 2 billion pounds [$2.51 billion] with hundreds of suppliers.”



Source link

Previous articleNvidia may launch three new Super GPUs to fight back AMD
Next articleIntel Core i9-14900KF overclock brings another world record