Apple’s recent profits—especially since Steve Jobs’ death—have been mind-boggling, to say the least. More than $10 billion in income in the last quarter of 2011 is pretty absurd for a period of three months, let alone an entire fiscal year. Though, according to the New York Times, Apple’s resourcefulness in avoiding billions in taxes is part of the reason for those ridiculous margins.
Last year, Apple only paid an overall tax rate of 9 percent—for a total of $8.3 billion worldwide—as opposed to the typical 24 percent paid by comparable corporations. In the U.S., Apple has a separate subsidiary company, Braeburn Capital, managing its assets. Because it’s based in tax-free Nevada, the tech giant avoids paying the 8.84% corporate tax rate of California, where it’s headquartered. Globally, Apple employs a similar approach , basing other asset-management subsidiaries in low-tax countries such as the British Virgin Islands and Luxembourg.
In response to the Times’ report, Apple wrote that it “has conducted all of its business with the highest of ethical standards, complying with applicable laws and accounting rules.”