How Apple's tax bill stacks up against its peers (graphic)

Apple pays the most taxes, but not at the highest rates.

"As our business has grown over the years, we have become the largest taxpayer in Ireland, the largest taxpayer in the United States, and the largest taxpayer in the world." —Tim Cook, letter to Europe

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Note: Earlier versions of this chart had two different numbers for Amazon's tax rate, neither of which seems to be correct. Until I understand what's going on, I'm taking it out.

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  1. David Emery said:
    This is worldwide taxes and worldwide revenue for each company, right?

    August 31, 2016
  2. Ken Cheng said:
    The Microsoft numbers look off.

    $94B in revs would be for the fiscal year ending June 2015, but they’ve reported another since then, $85B in June 2016. And, the the tax rate would be lower.

    I typically like to look at the last 4 fiscal years to take out some of the lumpiness that a single year may have due to a big reorg or other write down, acquisition, etc. If you look at Microsoft in 2015, you get an outlier year.

    The 3 companies I track that are included in your table, I have the tax rate average for the last 4 FYs as:
    Apple 26.0%
    Google 18.7%
    Microsoft 21.7%

    Of course, Apple’s tax rate, similar to other multinationals, is what they book, pending repatriation of foreign income. Essentially, this quick and dirty look at tax rates only indicates which companies tend to be conservative when accounting for foreign income. Apple books a far higher percentage of tax on its foreign income typically than its peers. If it didn’t book any US corp tax on its foreign income, Apple could be as low as 12% net effective.

    One implication of that, is that multinational companies have a great deal of leeway in determining their net effective tax rate, depending upon what they declare to the IRS about potential foreign income repatriation. Apple is ultraconservative, booking a far higher amount of tax than its peers. Given the leeway, I’ve always found it interesting and reassuring that Apple doesn’t seem to manipulate its deferred income amount in order to meet or exceed analyst earnings expectations. A less scrupulous company could easily do so.

    August 31, 2016
  3. Ken Cheng said:
    For companies with deliberately low income levels, like Amazon, and for young companies, like Facebook, tax rates can fluctuate wildly. They’re not really peers to the others in terms of comparing financials.

    August 31, 2016
    • David Drinkwater said:
      Now, now. Stop talking sense.

      September 1, 2016

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