Apple Inc. (NASDAQ:AAPL) likes to sue its competitors for copying its work. Whether right or wrong, Apple hates when its competitors copy its designs and procedures. The biggest story surrounding the company this week concerns the company’s tax situation, and its use of Ireland as a tax haven. It turns out that some other companies have been copying the Apple Inc. (NASDAQ:AAPL) tax plan.
Google Inc (NASDAQ:GOOG) is also in trouble with US and European regulators about the way that the company pays taxes. It turns out that Google Inc (NASDAQ:AAPL) has been following in the footsteps of Apple Inc. (NASDAQ:GOOG), running its money through Ireland in order to avoid paying taxes in other jurisdictions.
Yahoo! Inc. (NASDAQ:YHOO), less often accused of violating Apple Inc. (NASDAQ:AAPL) patents, is also using Ireland in order to cut down on its tax bill. All three companies are using dispensations from the Irish government, among other loopholes, in order to lower the tax take from their profits. Apple Inc. (NASDAQ:AAPL) is, however, an old hand at the strategy.
Apple Inc. (AAPL) Registered Three Companies
Apple Inc. (NASDAQ:AAPL) registered the three companies that are currently under scrutiny by the Senate in Ireland way back in 1980, long before either Google Inc (NASDAQ:GOOG) or Yahoo Inc. (NASDAQ:YHOO) came into being. Apple laid the way for this kind of tax avoidance among tech companies. Google Inc (NASDAQ:GOOG) is, in this case, definitely the copycat.
There are some differences between the way the two companies operate their taxes however, as Apple Inc. (NASDAQ:AAPL) CEO Tim Cook was keen to point out during the Senate hearing yesterday.
Over at Reuters, Tom Bergin points out that Apple doesn’t pass its Irish tax take onto Caribbean islands. Google Inc (NASDAQ:GOOG) and Yahoo Inc. (NASDAQ:YHOO) accountants are not as discerning.
Whatever you think about the Apple Inc. (NASDAQ:AAPL) tax policy in Ireland, Google may have violated intellectual property in this area. Defenders of Google and Yahoo Inc. (NASDAQ:YHOO) will be at pains to point out, however, that other companies had prior art.
Transfer pricing, and the associate methods of avoiding taxes, were not invented by Apple Inc. (NASDAQ:AAPL), and tech companies are not the only ones taking advantage of Ireland’s relaxed tax regime. Ireland is an attractive location for multinationals, and much of the attraction is due to the country’s tax policy.