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Technology / Software

Apple ‘avoided’ UK corporation tax in 2012

Apple has reportedly avoided paying UK corporation tax in 2012, which is expected to add fuel to already raising controversy over the US technology firms’ tax arrangement in the country.

The US tech giant used tax deductions from share awards to employees to help it in eliminating the corporation tax liabilities of its UK enterprises.

According to accounts filed by one of Apple’s two main UK units, Apple Retail UK, the firm has generated a pre-tax profit of £16m on sales of about £1bn up to 29 September 2012.

Apple’s another subsidiary, Apple (UK), made a pre-tax profit of £43.8m on sales of £93m, while the third one Apple Europe, generated a pre-tax profit of £8m.

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However, the firm had counterbalanced tax deductions concerning share schemes of £27.7m against its corporation tax liability in the UK, which also allowed it to claim a tax credit of about £3.8m to carry forward to years ahead.

In May 2013, a US Senate committee alleged that Apple used a complex web of offshore entities including three foreign subsidiaries to dodge taxes in the US.

Apple was also alleged of avoiding $9bn tax bill through the proceeds from its $17bn bond issue to pay shareholders rather than getting $100bn cash stashed abroad.

Earlier, mobile telecommunications firm Vodafone said it did not pay corporation tax in the UK for the year to March 2013, even though it generated more than £5bn in revenues in the country.

UK Prime Minister David Cameron has already asked Google’s executive chairman, Eric Schmidt, and other business leaders to be fair on paying tax in the country.

Apart from Google, Amazon’s tax arrangements in Britain also continue to be under scrutiny after the Guardian reported that the company’s UK subsidiary paid £3.2m of tax, despite generating £4.2bn sales in the country.
This article is from the CBROnline archive: some formatting and images may not be present.

CBR Staff Writer

CBR Online legacy content.