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The Ultimate Tax Haven Is Offshore Of New Jersey

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Sarah Palin was right: New York is, at least in the eyes of the taxman, not the real America.

In the convoluted world of corporate tax accounting however, simple concepts like “overseas” and “returned to the country” are not as simple as they appear.

Apple’s $102 billion in offshore profits is actually managed by one of its wholly owned subsidiaries in Reno, Nev., according to the Senate report on the company’s tax avoidance. The money is tracked by Apple company bookkeepers in Austin, Tex. What’s more, the funds are held in bank accounts in New York.

Because the $102 billion is technically assigned to two Irish subsidiaries, however, the United States tax code considers the money to be under foreign control, and Apple is legally entitled to avoid paying taxes on it.

This is not making the Irish very popular, either on Capitol Hill or at the EU's get-tough summit on tax avoidance, where they plan to talk the problem to death.

The findings and subsequent outcry — including suggestions that Ireland offered Apple particular advantages — put the Irish prime minister, Enda Kenny, on the defensive even before the meeting began.

“I’d like to repeat that Ireland’s corporate tax rate is statute based, is very clear and very transparent, and we do not do special deals with any individual companies in regard to that tax rate,” Mr. Kenny told reporters Wednesday afternoon….

The summit meeting has been billed as an opportunity to push ahead with a crackdown on tax avoidance among companies and individuals based in European Union states and neighboring countries. But the Apple findings could put pressure on participants to address the global tax strategies of multinational corporations.

Leaders were expected to discuss closing the gap between the ways that the wealthiest taxpayers and ordinary citizens are treated under European Union tax rules at a time when so many people are feeling the pinch from austerity policies and low growth in Europe.

To the intense irritation of the European Commission, the union’s executive body, and powerful members of the bloc like Germany and France, Austria and Luxembourg have resisted pressure to share banking information more widely and rapidly.

For U.S. Companies, Money 'Offshore' Means Manhattan [NYT]
European Union Leaders Meet On Tax Avoidance


Apple Is Smart

iBonds + low Swiss interest rate = $$$$$$$