A few blog posts were about banksters. This post is about non-financial companies. They manage to manage their finances so that they do not pay too much tax.
For example, there is a lot of pressure on Apple to change its ways.
Here is a neat Apple's trick. The US taxes companies on the basis of where they are incorporated and Ireland taxes companies on the basis of where they are managed. Simple arrangement: Apple Operations International is incorporated in Ireland and managed in the US. So it has not filed tax returns anywhere for the last 5 years. Between 2009 and 2012 its income was $30bln.
Apple Sales International had revenue of $74bln in 2009-2012 and claims not to be a tax resident anywhere. The tax it paid:0.05%.
More details of Apple's tax reduction methods are in this article. According to the article, in 2011 Apple paid "cash taxes" of $3.3 billion on profits of $34.2 billion (9.8%) while Walmart paid $5.9 billion on profits of $24.4 billion(24%).
Why is Apple so different from Walmart? One reason is that a large part of Apple's profits arise from its intellectual property: patents. They can be transferred to another company registered with a place with low taxes.
A commentary by a NYT columnist is here.
Before you criticize Apple's management recall that the duty of the management is maximizing shareholder value. One way to do it is to use legal means to reduce tax obligations. So the problem is not Apple, but tax laws.
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