Süddeutsche Zeitung, the biggest newspaper in Germany, on Wednesday published an open letter to Apple’s boss Tim Cook in which its editor-in-chief Wolfgang Krach claims that the Cupertino giant pays between 1 and 7% tax on its overseas income.

Krach came up with the figure after analyzing documents in the Paradise Papers leak. He said Apple has left questions posed by the paper unanswered, accusing the iPhone maker of tight-lipped platitudes when it comes to articulating its controversial tax practices.

“Apple bills itself as a transparent company. If this is true, then there really isn’t any reason to stay silent, is there?,” reads the report.

He slammed Apple for seeking official assurance of tax exemption from an unspecified country.

Why do you want that? Why do you feel entitled to not pay any taxes in a country? Did you want to make zero-tax status a precondition for establishing tax residency there? What gives you the right to do so?

Apple is the largest taxpayer in the world.

The Cupertino company has said that its effective tax rate on foreign earnings is 21% while denying recent reports that it moved untaxed offshore cash to the Channel Island of Jersey.

Commenting on Cook’s recent statement to The New York Times that Apple had a “moral responsibility” not only to help grow the US economy, but also “to contribute to the other countries that we do business in,” Krach says Apple’s “tax optimization” is about exploiting various loopholes in tax systems around the world.

Mr. Cook, do you believe Apple’s tax payment record comports with the ‘moral responsibility’ you have advocated? Such ‘tax optimization’–albeit legal–is only possible because specialized law firms such as Appleby devise complex company structures inaccessible to most other firms.

Skilled workers, small business owners and employees in most countries outside the US, many of whom surely use Apple products, don’t have the means to shirk ordinary taxes.

Apple up until 2014 had been exploiting a loophole in the Irish tax laws, known as the “double Irish,” which has enabled it to funnel all its overseas sales through Irish subsidiaries.

Instead of paying Irish corporate tax of 12.5%, or the US rate of 35%, Apple’s foreign tax payments rarely amounted to more than 5% of its foreign profits, and in some years dipped below 2%.

As an example, the European Commission calculated that the tax rate for one of Apple’s Irish firms for one year had been as little as 0.005% on billions of dollars of European sales.

Thoughts?

  • AOGV

    I don’t blame Apple for taking advantage of the law. It’s a loophole. It’s legal. ??‍♂️

    • Iskren Donev

      Exactly. As the hacker Harold Finch from the show Person of Interest used to say: “If they didn’t want me to break in, they ought to have built it better”

      • Mille

        Yeah, wouldnt want the government to get more capital to fund education, healthcare and infrastructure projects. Go Apple for investing money in creating new and innovative ways to avoid paying tax, the same tax that helps our society to evolve and benefit us and our families…

  • …and not a single f**k was given…

  • pnh

    Apple’s obligation is to shareholders NOT to governments who like to tax and spend. In fact, Apple would be negligent if they did not take advantage of every single loophole that is available to them.

    • TechnoBuff

      Yes.. Apple obligation is to shareholders but people seems to have forgotten that government creates the enabling environment that allows Apple and other OEM products to sell and operate.
      Government creates infrastructures that makes things possible. People should keep that in mind.

      • pnh

        That is the most ridiculous statement on the internet ever. It’s reminiscent of Obama telling businesses almost the same thing. Where do you think government gets the money and mandate to do those things? Government doesn’t create a thing unless of course you’re talking about a socialist country like Venezuela in which case they basically created a fudpuck of a mess.

      • TechnoBuff

        So i assume roads, bridges etc and other key infrastructure are built by Apple or other big companies around…. LOL.. Go figure!. i guess companies built the roads and bridges around.
        You need some basic lessons on how things work it seems.. Taxes paid by citizens and corporations are what makes those possible.
        Also funny how people are quick to have issues with taxation etc but are the first to call on the government as soon as they need it.
        I understand that excessive taxation is not good for business and citizens generally.
        Given the chance.. most people/companies does not want to pay any taxes but wants enjoy the convenience/infrastructure that comes with living in a modern society.

      • Mille

        Its incredible how ignorant and narrow minded some people can be. I live in a socialist country (Sweden) and the sole reason we have our high living standards is due to high taxes, although theyre not optimal they generate a lot of benefits. I completely agree with your analysis Technobuff, when times are good people want to maximize their own wealth but as soon things go south they rely on the government to bail them out…

  • TechnoBuff

    In as much as Apple has paid every dime owed. Apple and all other tech companies does not create the infrastructure that enables their products to sell and thrive. Apple cannot sell products in countries with poor infrastructure!. Try selling Iphones in part of Africa or Asia with poor infrastructure!

    Shareholders dont build roads or create other structures that enables tech companies to thrive.

  • thomas

    Apple’s obligation is to shareholders NOT to governments who like to tax and spend. In fact, Apple would be negligent if they did not take advantage of every single loophole that is available to them.

    • Mille

      You seriously think governments just tax for the sake of it? The government spending goes to education, healthcare and infrastructure investment..