How much money does Apple save by not bringing its cash hoard to the U.S.? It turns out that it’s a lot: $59.2 billion is the latest number, based on $181.1 billion in cash that Apple holds in offshore accounts.

DON’T MISS: PSA: You can watch 100+ movies for free on The Paramount Vault YouTube channel

The number comes from advocacy group Citizens for Tax Justice, which released a report on Tuesday looking at how much money corporations including Apple, Google and Microsoft save by parking their money in tax heavens.

Multinationals that have subsidiaries in various countries, including markets where they benefit from lax tax laws let them save – or avoid paying, whichever sounds best – an estimated $90 billion in federal income taxes each year, according to the report.

In addition to the three companies named above, plenty of other major American tech companies including Cisco, HP, Oracle, Qualcomm, Netflix and others employ similar tax tricks to avoid paying lots of taxes.

Google increased the amount of offshore cash from $7.7 billion to $47.4 billion in past years. Similarly, Microsoft increased its cash pile abroad from $7.5 billion in 2007 to $108.3 billion in 2014 – the company would owe $34.5 billion in U.S. taxes.

“Losing $90 billion of potential tax revenues every year is a very big deal,”, George Washington University, professor Neil Buchanan told Ars Technica. “That money could be used to reverse recent cuts in Head Start, and/or assistance to state governments to fund education at all levels, or increase the Earned Income Tax Credit, and on and on. Politicians who respond to proposals to fund these programs by saying that ‘we can’t afford it’ are simply saying, ‘I’d rather cut Apple’s tax bill than educate our children.’”

The tech site explains how some of the tax-related schemes work. In order for a company to be able to turn its subsidiaries abroad into cash hoarders, said company sells or licenses its foreign rights to intellectual property developed in the U.S. to the subsidiary located in a tax heaven. Thus, the profits deriving from that intellectual property are attributed to that offshore subsidiary rather than the main company that’s headquartered in the U.S.

Previous reports have shown that Apple and others have benefited from special tax treatment in various European countries including Ireland. Google, for example, paid 0.16% on €17 billion revenue in 2013, or around €27.7 million. The company also paid €11.7 billion in “administrative expenses” which The Irish Times described as “largely [referring] to royalties paid to other Google entities, some of which are ultimately controlled from tax havens such as Bermuda.”

The full report, of which an images can be seen below, is available at the source link.

apple-google-microsoft-tax-loopholesImage Source: CTJ.ORG

Comments