Apple Tax Strategy: With so much money coming into and leaving the company, the people in charge of Apple Inc. (NASDAQ:AAPL) accounting probably sleep at their desk. Can you imagine being a part of this group of individuals? As if the entire process is not complicated enough, you have the tax man looking over your shoulder at all times.
Of course, when you are one of the most valuable companies in the world this comes with the territory.
As we have discussed in the past, companies such as Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG) are proficient at lowering their tax bill as a means of saving money. For example, we recently talked about Google’s ability to avoid taxes in a perfectly legal manner by moving revenues into offshore companies.
With its latest debt deal, Apple Inc. (NASDAQ:AAPL) has some tax implications to deal with. Fortunately, it appears that things are going to work in the company’s favor as far as this deal is concerned.
According to a report by Bloomberg, the Cupertino based company was able to avoid more than $9 billion in taxes by “financing part of a $55 billion stock buyback with debt rather than offshore cash that would have been billed by the U.S. government.”
This is one of those things that a company like Apple can do to save billions of dollars in taxes.
This savings, as estimated by Moody’s Investment Services, is a huge deal for Apple Inc. (NASDAQ:AAPL). After all, who wants to pay more in taxes than they have to? This is particularly true when the number in question is in the billions.
While this is good news for Apple, from a tax perspective, the bad news is that last year the company got hit with a huge corporate income tax bill. That being said, there was nothing unfair about it.
According to Apple Inc. (NASDAQ:AAPL) spokesman Steve Dowling, the company paid “$6 billion in federal corporate income taxes.”
With a number like this, it is safe to say that Apple pays among the most corporate income tax of any company in the world.
Companies like Apple are always looking for legitimate ways to save on taxes. It appears that the company has found a way to do just that with its latest debt deal.
In the years to come, as Apple revenue continues to increase, it will be interesting to see just how much it has to pay the tax man in corporate income tax. It won’t be pretty.
To learn about how Apple has saved on taxes in the past, check out the following video: