So my previous post was about Apple’s marketing strategy which seems to be one of the most powerful tools to the company`s success. Apple is still the world´s most profitable technology company. So when you start thinking about profitability and cost minimization, marketing turns to be not that helpful and powerful. Almost every big company tries to reduce its cost and expenses, as for example taxes.
It was totally new for me that Apple managed to avoid millions of dollars in taxes in California and 20 other states just by putting its headquarters in Nevada. The trick is that California’s corporate tax rate is 8.84 % while Nevada’s – zero.
Moreover, Apple has created subsidiaries in low-tax places like Ireland, the Netherlands, Luxembourg that help cut the taxes it pays around the world.
Of course, we are talking now about legal “loopholes” that help to minimize a company’s tax bill that were found by Apple’s accountants in 2006 as Apple’s bank accounts and stock price were rising.
For example, this year Apple managed to reduce its tax bill by $2.4 billion. A huge number, especially if you imagine how many Apple products are being sold all around the globe every year.
On the other hand, some people argue that Apple does a lot of charity work, donating money for example, to Stanford University and some African aid organizations.
So it seems to be a complicated issue to find a balance between profitability, customer recognition and ethics.