Apple pays under 2pc tax on profits overseas

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TECHNOLOGY giant Apple paid less than two per cent tax on its overseas profits, documents revealed yesterday, after the iPad and iPhone giant slashed the amount foreign taxmen receive.

Apple paid 713 million US dollars (£445m) in corporation tax outside the US in the year to September 29, despite its foreign pre-tax earnings surging more than 50 per cent to 36.8 billion US dollars (£23bn), papers filed with US regulators have revealed.

The technology giant’s overseas tax rate fell to 1.9 per cent, compared to 2.5 per cent the previous year and a headline corporation tax rate in the UK of 24 per cent and 35 per cent in the US.

The slide in its overseas tax rate came as the company sold 125 million iPhones, 58 million iPads and 13.5 million MacBook laptops worldwide, including the US.

Apple was not immediately available for comment yesterday.

The California-based firm is the latest company to come under scrutiny for making a poor contribution to overseas coffers after Starbucks, Facebook and Google met similar criticism.

Coffee giant Starbucks reportedly paid just £8.6m in corporation tax in 14 years of trading in Britain - and nothing in the last three years.

And America’s top five technology companies, including Facebook, Amazon and eBay, legally avoided around £850m in corporation tax last year, a Sunday Times investigation found.

Companies are able to sidestep the taxman by constructing complex global structures that allow them to move money through offshore havens.

Apple channels much of its business in Britain and Europe through a subsidiary based on an industrial estate in County Cork, Ireland, The Sunday Times reported.

Ireland’s corporation tax is about half the level of the UK.

Apple recorded a 45 per cent rise in turnover to 156 billion US dollars (£97bn) in the year, helping deliver a 63 per cent rise in pre-tax profits to 55.8 billion US dollars (£34.8bn).

It paid 13.3 billion US dollars (£8.3bn) in federal and state taxes in the US.

The Apple computer company was formed by Steve Jobs and Steve Wozniak in April 1976. In recent years, the group has grown dramatically in response to global demand for consumer electronics.