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Apple Posts $18B Quarterly Profit, the Highest By Any Company, Ever
jmcbain writes: Yesterday, Apple reported its financial results for the quarter ending December 27, 2014. The company posted $18 billion in profit (on $74 billion in revenue), the largest quarterly profit by any company, ever. The previous record was $16 billion by Russia's Gazprom (the largest natural gas extractor in the world) in 2011. Apple sold 74.5 million iPhones last quarter, along with 5.5 million Macs and 21.4 million iPads.
They are paying 26% tax. It's right there in the filing.
No, this is really an absurd profit, Standard Oil's net profit from 1882 to 1906 was $838,783,800 equal to roughly $22B today, so on an inflation adjusted basis Apple's quarterly profit was nearly equal to the majority of the lifetime profits of one of the classic robber baron trusts.
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No, this is really an absurd profit, Standard Oil's net profit from 1882 to 1906 was $838,783,800 equal to roughly $22B today, so on an inflation adjusted basis Apple's quarterly profit was nearly equal to the majority of the lifetime profits of one of the classic robber baron trusts.
The U.S. population in 1906 was 85,450,000 compared to 2014's population of 322,583,006. Apple is definitively a world wide, global corporation. Did Standard Oil reach as far.
Sorry, but you don't have much of a comparison here.
I thought I'd check, and in their 2014 annual accounts, Apple showed tax payable of $14 billion on a net profit of $40 billion. Unless this is just some totally fictitious accounting entry, I'm not sure where you get the idea that they don't pay any tax.
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Amazon: .1% operating margin.
Apple: 29.3% operating margin.
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uh, yes I clearly do.
FYI:
Apple's group finance company, which has no operations and no shareholders and no employees, is registered in Ireland. Because it has no operations and no shareholders and no employees, it has no turnover, therefore doesn't pay tax.
THE DODGE:
Apple's sales revenues in the US are routed through this holding company in Ireland hence those sales are not actually done through a company registered in the US. They're done through a company registered in Ireland, which, having said that they have no employees, no shareholders and no operations, isn't liable for tax on money passing through it because it *creates no value*. Ergo, Apple pays no tax on revenue generated in the US because legally it doesn't, and no tax on operations in Ireland because while there is a ghost company called Apple, Inc, registered in Ireland, it is just that - a ghost entity that goes nowhere and does nothing EXCEPT handle a money stream that doesn't belong to it. It does no business in Ireland whatsoever. Any sales Apple do in Ireland are handled through a similar ghost entity registered in Luxembourg and like its Irish cousin, claims zero tax residence (because you don't HAVE to declare a tax residence when you don't PAY any tax).
Political debates have me rolling my eyes so much I think I got optical whiplash. I should sue. - Foamy The Squirrel
Maybe you should bother to look so you don't sound like you're an idiot.
Revenues from hardware - $69.8B
Revenues from other(iTunes) - $4.8B
Net profits (not broken down) - $18B
Even if 100% of revenues from iTunes was profit (i.e. no cost to run the App Store), it's still less than 1/3 of total profits.
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It looks to me like you've got this wrong.
According to this Forbes article from 2013, Apple routes all non-US sales revenue through Ireland. That's sketchy on the part of both Ireland and Apple, and offensive to all the other countries that get no cut from Apple's sales within their borders.
According to this financial statement, Apple paid $9.48b in current US income tax in 2014, $2.15b in current foreign income tax.
Pooling everything, in 2014 Apple had pre-tax income of $53.48b, $13.97b total income tax, for a net income of $39.51b.
I don't know how those numbers compare to other large corporations, or "socially responsible corporations", or whatever you want to compare to. But claiming that Apple routes US sales revenues through Ireland, or that Apple doesn't pay tax on its profits, appears to be completely false.
If I'm misinterpreting these numbers, please post corrections.
Which is the amount they couldn't find a way to avoid. Their profits would be taxed at around 40% in the US, but they funnel them to Ireland (the famous "Double Irish") and pay 0% on them. What they do pay is made up of sales tax, employment taxes, and tax on things like property that they can't pretend does not exist in any taxable jurisdiction.
This is somewhat misleading. The US is special in that its the only country that actually taxes income that isn't even earned in the country. Most countries will tax someone on the income generated in the country, but not tax income generated outside the country. That includes both corporations and *people*. If you are a US citizen and you go outside the country and earn income, you're required to pay US income tax on that income, even though it was earned entirely outside the country. To repeat: that's something practically unique to the US.
The US does provide an exception: if that income was already taxed by another country, you're allowed to declare that because you already paid taxes on that money to someone else, you don't have to *also* pay taxes to the US. Again: that's not just for corporations like Apple, but also for individuals.
Apple is required to, and does pay US income taxes on net income it earns in the US: it cannot simply "funnel" the income to another country to dodge taxes, and everyone saying that simply is confused or mistaken. If that was possible every corporation would do it and no one would pay any taxes. What companies like Apple *can* do, however, is a) pay taxes on that income in another country, particularly one with a much lower tax rate and b) don't bring the money back to the US, where they would then have to pay US tax on it.
Is this "dodging taxes?" Yes. But not really *US* taxes. The countries with the biggest beef with Apple are really European countries for whom Apple doesn't pay taxes on income generated in those countries because that revenue is funneled into Ireland. But that money would *not* be "taxed at around 40% in the US" because if Apple didn't funnel that income to Ireland (where it has special sweetheart deals that Ireland gave to many companies, to the chagrin of many other EU countries), it would then be taxed in the individual countries it was earned, and the US would still not see a dime of it.
As to dodging taxes by not explicitly transferring that money earned overseas back to the US? It has yet to be explained why a company that earns money overseas has an obligation to transfer that money to the US explicitly for the sole purpose of paying US taxes on it, and for no other reason. That's simply illogical.
But as to the income Apple generates in the US by its business operations in the US: for the most part, it pays taxes on that income just like every other corporation.