Even after the Senate Subcommittee hearings there are some who still don't quite seem to understand what Apple's been doing over taxes. Sadly, Bloomberg's Jonathan Weil seems to be one of them. An important point to understand is that Apple has not been moving profits out of the US in order to reduce the corporate income tax bill. There are other companies that this could be said of, but not of Apple. Apple has indeed been profit shifting, but out of places like the UK and Germany and into Ireland. And Apple has most certainly been keeping those foreign profits out of the US, something which substantially reduces the US corporate income tax bill. But this is not the same as having moved profits out of the US. And that's the distinction that Weil is missing here: Take another example that the senators pointed to: Apple, as do many other multinational companies, uses a technique called transfer pricing. This lets it move income away from the U.S. to Ireland, where it has negotiated a 2 percent tax rate with the country's government. No, this isn't what Apple does. All US income is reported in the US and US taxes are paid on it at the full allowable rate. Apple does not move profits out of the US to Ireland: what it does do is keep profits earned outside the US outside the US. The Senate report said Apple shifted $74 billion in income to Ireland from the U.S. through its cost-sharing agreement from 2009 to 2012. Again, this isn't what Apple has done. There is no movement of funds from the US to Ireland. Rather, the money made selling in Germany, China, the UK and so on goes to Ireland. It simply is not moving anything at all out of the US.
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