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Monthly Archives: April 2012

How Apple Minimizes its Corporate Tax Burden

apple_taxes_profitsIn the latest installment of its “iEconomy” series, The New York Times takes a look at how Apple minimizes its corporate tax burden, taking advantage of a number of legal maneuvers and loopholes around the world. Apple’s strategies are of course fully legal and used by many other corporations, but with a spotlight on Apple as it has rapidly risen to become the world’s most valuable publicly-traded company with record-setting profits, it has obviously attracted much attention about how it handles its money.

Apple, for instance, was among the first tech companies to designate overseas salespeople in high-tax countries in a manner that allowed them to sell on behalf of low-tax subsidiaries on other continents, sidestepping income taxes, according to former executives. Apple was a pioneer of an accounting technique known as the “Double Irish With a Dutch Sandwich,” which reduces taxes by routing profits through Irish subsidiaries and the Netherlands and then to the Caribbean. Today, that tactic is used by hundreds of other corporations — some of which directly imitated Apple’s methods, say accountants at those companies.
Among the tactics used by Apple:

– Setting up subsidiaries in low-tax locations such as Nevada, Ireland, Netherlands, Luxembourg, and the British Virgin Islands, routing as much revenue as possible through these locations. By routing much of its U.S. revenue through its Braeburn Capital subsidiary in tax-free Reno, Nevada, Apple is able to avoid California’s corporate tax rate of 8.84%, while also reducing its tax burden on money earned in other states.

– Apple’s iTunes S.à r.l. subsidiary in Luxembourg consists mainly of a mailbox and a few dozen employees, but records $1 billion per year in revenue as the entity responsible for all iTunes Store transactions throughout Europe, Africa, and the Middle East. With the iTunes Store offering strictly downloadable goods, Apple is able to take advantage of favorable tax treatment available in Luxembourg as part of the country’s efforts to attract businesses.

– Apple has substantial operations in Ireland, but the report notes that one of the main benefits of locating there is that Apple is able to internally transfer its patent royalty earnings to a subsidiary there, with the money being subjected to a 12.5% tax rate rather than the 35% tax rate found in the United States. More than one-third of Apple’s worldwide revenue is booked through its Irish subsidiaries.

– Apple records 70% of its revenue overseas, even though much of the product value would normally be considered to derive from their design, which occurs in the United States.
Overall, Apple paid $3.3 billion in corporate taxes in 2011 on earnings of $34.2 billion in profits, an effective tax rate of 9.8%, which is considered low by corporate standards. But with the company’s tactics relying on a complex and disjointed system of tax laws throughout the world, it is difficult for the United States to single-handedly require Apple to book more of its revenue in its home country, which currently has the highest corporate tax rates in the world when federal and average state rates are included.

Apple has provided an official response to The New York Times, highlighting its role in job creation in the United States, the tax payments it does make, and its charitable giving. The company also notes that its business practices are in full compliance with all laws and accounting rules.  by iclarified

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Posted by on 30/04/2012 in IT

 

How Apple Sidesteps Billions in Taxes

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The New York Times reports on Apple’s tax strategy that aims at low-states and nations.

While the company has remade industries, ignited economic growth and delighted customers, it has also devised corporate strategies that take advantage of gaps in the tax code, according to former executives who helped create those strategies.

78540-500Apple, for instance, was among the first tech companies to designate overseas salespeople in high-tax countries in a manner that allowed them to sell on behalf of low-tax subsidiaries on other continents, sidestepping income taxes, according to former executives. Apple was a pioneer of an accounting technique known as the “Double Irish With a Dutch Sandwich,” which reduces taxes by routing profits through Irish subsidiaries and the Netherlands and then to the Caribbean. Today, that tactic is used by hundreds of other corporations – some of which directly imitated Apple’s methods, say accountants at those companies.78538-500

If Apple didn’t use such methods to reduce its taxes it would have had a tax bill $2.4 billion higher, according to former Treasury Department economist, Martin A. Sullivan. Apple paid cash taxes of $3.3 billion on $34.2 billion in profits last year, a tax rate of 9.8%. by iclarified

 
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Posted by on 30/04/2012 in IT

 

Apple and Samsung Settlement Talks Set for May

78535As reported earlier, Tim Cook has already gone on the record to say that he would rather settle than battle and sit through litigation.

I’ve always hated litigation, and I continue to hate it,” he replied. “We just want people to invent their own stuff. And so if we could get to some kind of arrangement where we could be assured that’s the case and a fair settlement on the stuff that’s occurred, I would highly prefer to settle versus battle. But it — the key thing is that it’s very important that Apple not become the developer for the world. We need people to invent their own stuff

Well it now seems that his statements will be put to the test, when Apple and Samsung meet in a few weeks for court-ordered settlement talks.

Judge Lucy Koh of the United States District Court for the Northern District of California ordered the conference on April 17, and now Magistrate Judge Joseph C. Spero has scheduled the talks for May 21-22, starting each day at 9:30 a.m. Pacific.

Cook’s remarks indicate that Apple might try to agree on a settlement that would require Samsung to make changes to Android phones that make them look and feel so much like the iPhone. Florian Mueller, of FOSS Patents, claims that Cook’s statements clearly show that “differentiation remains a priority objective for Apple.”

While the date is scheduled for May 21-22, it could very easily get pushed back because of the current 50+ cases that are pending by iclarified

 
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Posted by on 30/04/2012 in IT

 

Quasar Brings Multi-Tasking Windows to the iPad

78530Quasar, a new tweak just released in Cydia, is a multi-tasking window manager for the iPad.
Quasar is (the very first) window manager for iPad! Now you can run apps in windows, on your iPad! Simply open any application and it will be opened in a window, just like in your computer. Quasar is integrated to iOS’s default app switcher (double pressing home button). Killing an application in app switcher (or holding the close button) kills its window and the application itself, but if you only click the close button, the window is closed but the application keeps running in background (in the app switcher).
It is integrated too with notification center and with Safari/App Store/YouTube/links that opens other apps. iPhone applications are optimized to run in the right resolution in Quasar.

You can purchase Quasar from the Cydia Store for $9.99. Take a look at the video below to see the tweak in action. by iclarified

 
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Posted by on 30/04/2012 in IT

 

Gevey Ultra 5.1 for GSM iPhone 4 Recalled

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The GEVEY Ultra 5.1 for the GSM iPhone 4 has been recalled since it used Loktar Sun’s free method to unlock your device which has been disabled. Apple N Berry is offering a full refund to customers who purchased the device.

Apple N Berry, LLC is accepting returns for all GEVEY Ultra 5.1 for GSM iPhone 4 purchased on our website. Customers who haven’t received their shipment yet will automatically receive a full refund via their payment method chosen during checkout. Paypaly usually returns funds to user accounts within 10 days after we issue refunds.

Shanghai Ai Guan Digital Technology Co., Ltd., the rights holder of GEVEY brand products, is taking full responsibility for this recall and has vowed to avoid incorporating server-side exploits in future GEVEY products. by iclarified

 
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Posted by on 30/04/2012 in IT

 

Opera Browser to Begin Supporting -Webkit Prefix

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Opera has confirmed that they will begin supporting the -webkit prefix in their web browser, according to FarukAt.es.

The -webkit prefix is normally only used by webkit browsers to denote experimental features.

Their argument, roughly summed up, is that too many websites have started to take advantage of new HTML5 and CSS3-features in a way that only benefits those users with WebKit-based browsers-Chrome, Safari, and every iOS and Android device’s default browser-and that the authors of those websites have done a “lazy” job not including a standards-compliant version of features.

Basically, Opera is complaining that developers are coding for -webkit and not using -o. So, when a site is viewed in the Opera browser it doesn’t look correct.

While this decision might make some sites look better in Opera. It’s not necessarily a good change.

Opera’s precedent is opening the door for Mozilla (Firefox) and Microsoft (IE) to do the same, meaning that for authors-the group already accused of being too lazy to do the right thing-the Web is about to become an ever-more fragmented mess, where the once-safe experimental feature known as -webkit- (and -moz- etc.) now will come to represent a much more fragile, questionable feature or implementation. by iclarified

 
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Posted by on 30/04/2012 in IT

 

Steve Wozniak: Windows Phone is ‘Much More Beautiful’ Than Android and iPhone

Steve Wozniak says for looks and beauty he definitely savors Windows Phone 7 over Android in an interview with ANewDomain.

“I’m kind of shocked. Every screen is much more beautiful than the same apps on Android and iPhone,” Wozniak told the site, referring to Windows Phone 7.

The Verge notes that He’s so impressed by it, in fact, that he defines the experience of using a Windows Phone as feeling like you’re “with a friend not a tool.” In his mind, navigating Android is a much more cumbersome experience, to the point where he sees “no contest” between that OS and Windows Phone – Microsoft’s software is much more to his liking. He even goes on to say that iOS is “more awkward” in its interactions than the Lumia phone he’s presently using, though his favorite smartphone still remains the iPhone. The deficit of third-party apps for WP is something he acknowledges as holding that platform back. by iclarified

 
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Posted by on 30/04/2012 in IT

 
 
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