Anorak News | No, really, Apple still isn’t avoiding UK tax

No, really, Apple still isn’t avoiding UK tax

by | 5th, February 2013

THE Sunday Times has done yet another of its pieces on how tech comapnies are avoiding tax in the UK. Given that that paper’s gated, here’s the Telegraph telling us all about it. The real problem here is that Apple just isn’t indulging in tax avoidance: this is what the system is set up to encourage it to do

Apple is estimated to have avoided more than £550m in tax in Britain in 2011. Its latest accounts show UK turnover at just over £1bn and profit at £81.3m, generating a tax bill of £14.4m.

However, analysis of its filings in America suggest a more realistic figure for UK turnover is £6.7bn. This would imply an estimated profit of £2.2bn and, at the then corporation tax rate of 26pc, a £570m tax bill, the Sunday Times reports.

Tax evasion is the illegal stuff. The way tax campaigners explain it to us, tax avoidance is doing stuff that the law allows you to do but would rather you didn’t do.

What Apple is actually doing is selling all of its kit from Apple in Ireland. These folks. You buy it online, it comes from them.  You’re a dealer, it comes from them. You’re a shop, it comes from them. You’re an Apple shop? Your stock comes from them. That’s just the way that corporation rolls.

So, is this tax avoidance? Nope, it ain’t. The European Union has set up this single market thing. And the point of this Single Market (yes, it’s important enough to have capital letters) is that a corporation should treat the whole of the EU as a single market. Just like we expect everyone to ignore county boundaries when selling in England, so national boundaries should be ignored when selling in the EU.

This is what Apple is doing: selling to everyone from one corporation, one EU base. And the other half of this is that you pay the corporation tax where that company is. In that one country. And that’s what Apple is doing.

This just isn’t tax avoidance: it’s the way the system was designed to work. This is what the EU actually wants to happen.

BTW, Apple is indeed dodging the US corporate tax system but that’s another matter entirely.

Posted: 5th, February 2013 | In: Money, Technology Comment | TrackBack | Permalink