Apple Inc. (NASDAQ:AAPL) may be in trouble in the UK as the firm’s tax filings are evidence surfaced in the Daily Mail that the company had paid only £10 million in corporation tax in the country last year despite securing sales of around £6 billion in the same period. The news has come in the wake of a reported investigation by the UK’s revenue service into the tax practices of Amazon another internet giant. That company did not pay any corporation tax in the United Kingdom in 2010 or 2011 after moving its base of operations to Luxembourg.
The accusation of Apple’s tax avoidance was reported by the Daily Mail earlier today. That report showed that Apple was possibly logging sales in other locations though those sales were made inside the United Kingdom. The company may be using its operations in the Republic of Ireland and in the British Virgin Islands. Ireland has a corporation tax of just 12.5% almost half of the United Kingdom’s 24% rate. The company’s two main sales arms in the UK, Apple Retail UK Ltd. and Apple (UK) Ltd., lodged just £500 million and £67 million in sales in the country last year. This left the company’s paying £3.79 million and £6.1 million in taxes respectively. The total sales figures are estimated to have been much higher in the country than Apple reported.
Apple’s market capitalization popped over $600 billion today for the first time as the company pushes to even greater heights as the world’s most valuable company. It’s not the first time the company has had trouble with its tax management however. It has been trying for some time to get a tax holiday on moving some of its cash reserves back into the United States. So far the federal government has proved unmoving on any such deal. The company has around £40 billion of its cash reserves held overseas. The company was viewed as the second most favorable of the large tech company’s in a poll of Americans by ABC and the Washington Post. The company maintains a 74% favorable opinion ration rating with American consumers.
Apple is not yet being investigated by UK authorities over its tax dealings but if the Amazon proceedings are anything to go by and popular and media opinion maintains pressure on the issue the government may be forced to act on the matter. The matter may result in more detailed investigation into the allocation of the company’s revenues.