Apple Inc. (NASDAQ:AAPL)‘s management, which by nature of corporate design is required to represent shareholders’ will might be doing just the opposite when it comes to fattening the bottom line by manoeuvring their way around taxes. In a panel discussion on CNBC, Neil Dwane, CIO for Equities for Europe at Allianz Global Investors, drew attention to the shortcomings in Apple’s corporate governance structure.
Apple Inc. (NASDAQ:AAPL) has been the focus of the latest EU probe into illegal Irish tax deals. Dwane argues that even if the tax share that Apple Inc. (NASDAQ:AAPL) pays is legal, it’s not fair. He points out that companies like Apple Inc. (NASDAQ:AAPL) use the host country’s infrastructure to earn significant revenues and when it’s their turn to give something back to the community, they play the tax avoidance, or tax efficiency, game. In his opinion, if Apple’s shareholders were to have any say in this issue it would be contrary to the laissez-faire with regards to the company’s policy in relation to tax avoidance.
“[…] There is a governance issue representing shareholders, which I feel we have to tell companies, you know, the world is generally in a tough place, and most citizens want everyone to be paying their fair share, not necessarily their legal share but their fair share […] Apple Inc. (NASDAQ:AAPL) sells hundreds of millions of pounds worth of products and pays no tax, we wouldn’t call that fair […],” said Dwane.
It is no secret that large multinational corporations formulate a complex network of subsidiaries to move their revenues in a tax haven where they have to pay much less tax. While libertarians believe that this presents opportunities for other countries to attract capital from big companies like Apple, others believe that it drains funds from the host countries.
Another panellist also highlighted the increasing complexity of tax regime that makes it possible for companies like Apple Inc. (NASDAQ:AAPL) to exploit the loopholes in the tax code. Some of these voluminous tax codes even make novels like War and Peach seem like a short story.
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