04 January 2016
How Much Apple and Other US Tech Companies Pay in Taxes
As the chart above illustrates, Apple is far from alone among tech companies in trying to pay as little taxes as possible. Apple and Google and other large tech companies have been accused of avoiding U.S. taxes by stashing foreign earnings in countries with lower corporate tax rates. When asked about his company’s tax avoidance practices in an interview with “60 Minutes”, Apple’s CEO Tim Cook rebutted the allegations saying that Apple pays “every tax dollar it owes”. He also criticized the U.S. tax code for being outdated in the digital age and claimed that Apple pays more taxes than any other company. While possibly true in total terms, it definitely isn't in relation to the company's outlandish profits. In 2014, Apple paid $13.97 billion in income taxes, which is more than what IBM, Microsoft and Google paid combined. But Apple’s effective tax rate (the average rate at which pre-tax profits are taxed) in 2014 was 26.1%, 2.5 percentage points below the average tax rate paid by S&P 100 companies in 2014, as well as the statutory federal income tax rate of 35%.
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