Technology

Apple Uses Tax Maneuvers To Hide Large Profit

The Associated Press reports that analysts suspect Apple of using special tax maneuvers to hide their large profits. The company is getting ready to report their second quarter profit on Tuesday, but financial experts are convinced that the reported sum is going to be a lot smaller.

Everyone is waiting for Apple to announce their latest figures, considering that there is a strong competition between the American company and Samsung. After carefully analyzing the past reports released by Apple, experts have strong reasons to believe that the figures on paper will be a lot smaller than they are in real life. They motivate their hypothesis by saying that the iPad maker is using tax maneuvers to hide their real profit.

Analysts have estimated that Apple should register a net income of $9.8 billion during the second quarter. However, they are convinced that the company will understate its profit, so they wouldn’t have to pay too many taxes. The technique they use is that of declaring tax bills they never actually pay.

There is no need for Apple to declare these phantom tax obligations, but they sustain they are forced to do it so they could build an asset that is worth billions of dollars. If the smartphone maker agrees to eliminate the phantom taxes, its profit from the past three years could amount to $10.5 billion, according to analysts.

Investors, too, would like Apple to announce a bigger profit, but executives know that indirectly admitting they were using phantom taxes would affect their reputation. As a result, the company is trying to slightly modify the U.S. law so they could erase their liabilities without being portrayed as an irresponsible tax payer.

Apple is probably one of the most inventive companies when it comes to reducing bill taxes. Most maneuvers are used for their overseas accounts because they can shift profits to countries with low tax rates. The “Double Irish With a Dutch Sandwich” is most used at present because multinational companies take their profits through Irish and Dutch subsidiaries and then, to the ones in the Caribbean. Thus, Apple’s overseas accounts have gathered $74 billion and the company doesn’t pay anything to the U.S. government.

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Eli Wads is one of our expert authors in technology and business fields.Currently living in San Marino, Eli has graduated at Southwestern Academy with a Bachelor Degree in business in 2008. Contact him by dropping him an e-mail at Eli.Wads@dailygossip.org

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