iTax - Apple's international structure and the double non-taxation issue

Resource Information

The work iTax - Apple's international structure and the double non-taxation issue represents a distinct intellectual or artistic creation found in International Bureau of Fiscal Documentation. This resource is a combination of several types including: Work, Language Material, Continuing Resources.

Label

iTax - Apple's international structure and the double non-taxation issue

Creator

• Ting, A

Subject

• CbCR
• MNE
• domestic tax law
• BEPS
• tax avoidance
• tax structure
• tax treaty
• double non-taxation

Language

eng

Summary

Apple, famous for its innovative products, has proved to be equally creative in its tax structure. From 2009 to 2012, it successfully sheltered US $44 billion from taxation anywhere in the world. An unusual feature of its tax structure is the relative simplicity: it does not rely on the Double Irish Dutch Sandwich structure that has been commonly used by other US multinationals. A recent parliamentary hearing in the US revealed detailed information about Apple's tax structure, which is difficult, if not impossible, to discern from its financial statements. At the same time, interesting information and issues of tax avoidance by multinational enterprises from the perspective of source countries were also revealed in parliamentary committee hearings in the UK. The aim of this article is twofold. First, it analyses the international tax structure of Apple and investigates how it achieved the double non-taxation of US $44 billion. The analysis reveals that the US Government has knowingly facilitated the avoidance of foreign income tax by its multinational enterprises (MNEs), thus creating double non-taxation. It also highlights the structural issues of domestic and international tax rules that enable the creation of double non-taxed income. Secondly, the article reviews the possible responses of both the residence and source countries to Apple's tax avoidance structure, and argues that two issues are important in the design of effective solutions to the problem. First, the application of the enterprise doctrine - under which a corporate group under the common control of a parent company is treated as one single entity - is more likely to produce effective measures to tackle MNEs' tax avoidance transactions. Secondly, the increase in transparency, in particular a properly designed country-by-country reporting regime, would be a much needed weapon for tax authorities which at present suffer from information asymmetry in the tax avoidance battle with MNEs

Citation source

In: British tax review. - London. - (2014),

Geographic coverage

International

Language note

English