Apple Australia hit with $28.5M in back taxes after questionable use of tax havens

Days after executives from Google, Amazon, and others were grilled by regulators in the United Kingdom over the issue of tax avoidance in Europe, The Sydney Morning Herald reported today that Apple’s Australian arm has been hit with a $28.5 million bill for back taxes in the country:

APPLE AUSTRALIA has been hit with a $28.5 million bill for back taxes, statements lodged with the corporate regulator in April show… News of the Tax Office bill comes as European governments put global technology companies under intense pressure over their complex ownership structures that rely heavily on a network of tax havens… Apple’s Australian arm reaped $4.9 billion in revenue last year through the sale of its computers, iPads and iPhones. The bill takes its total tax tab for the year ending September 24, 2011, to $94.7 million.

Earlier this year, The New York Times profiled how Apple uses tax havens, such as Nevada, Ireland, and Luxembourg, to sidestep taxes in both the United States and Europe. The U.K. isn’t the only country putting pressure on technology multinationals over tax avoidance schemes, SMH also noted the French government requested $252 million USD in back taxes from Amazon, a company that also uses Luxembourg as a tax haven for its Europe operations, earlier this week. Read more

Apple planning $1B investment for new data center in Reno, Nevada

It looks like Apple may actually use Reno Nevada for something more than a Tax haven.

According to several local reports, Apple is currently considering building a new data center in Nevada. KRNV & MyNews4.com reported today that Apple representatives attended a Washoe County Commission meeting to discuss plans to invest $1 billion over 10 years and build a new data center at the Reno Technology Park:

News 4’s Ben Briscoe is at the Washoe County Commission meeting, where Officials from Apple are speaking to commissioners… Mary-Sarah Kinner, the Press Secretary for the Governor’s Office confirms to News 4 the Governor’s Office of Economic Development is involved in the deal to bring Apple to Northern Nevada.

The report claimed Apple said it plans to begin construction in August and hopes to finish by the end of 2012. Although the Governor’s Office apparently estimated the project would result in over 300 jobs and 500 construction jobs, the Washoe County School Board and the Reno City Council still have to sign off on the deal. Mynews4.com reported the City of Reno is expected to make a decision at tomorrow’s council meeting. Apple already operates its own data centers in Maiden, N.C., and it recently announced plans to expand at the location and on 160 acres of land it purchased in Prineville, Ore.

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Senator Tom Coburn says he’s ‘absolutely livid’ about Apple’s tax practices

Republican Senator Tom Coburn of Oklahoma appeared on “Morning Joe” earlier this morning to talk the debt crisis. During the interview, a question came up about a piece The New York Times ran this weekend that discussed Apple’s tactics of legally skirting billions in taxes each year by using tax havens like Nevada, Ireland, Luxembourg, and the Virgin Islands. Keep in mind: These practices are perfectly legal and other large companies are doing the same. However, when the Senator was asked about the topic, Coburn sternly replied that he’s “absolutely livid.”

As a solution to the issue, Coburn said that the nation needs to “reform the tax code,” which he said will lead to economic growth. The senator also said he has begun work with Michigan Senator Carl Levin to look into how Apple is doing this. The big thing it looks like the senator wants to do is bring the funds from these larger companies back into the United States to help put more money back into the economy—obviously through large taxes.

Apple currently has $74 billion of its money off-shores, and it is pushing, along with other companies, for a tax-holiday where it could bring its money back into the U.S at a cut tax rate. Apple responded to the NYT piece on Sunday:

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Don’t hate the player, hate the game -NYTimes’ ‘How Apple Sidesteps Billions in Taxes’

The New York Times delves into a divisive subject in American politics right now: Tax avoidance. Apple, like most international companies, sidesteps many California, United States, European, etc., taxes by using tax havens like Nevada, Ireland, Luxembourg, and the Virgin Islands.

The problem for the protagonists is that this is all very legal and practiced by just about every multi-national company in the interest of remaining competitive and maximizing stockholder share. Like most matters of this sort, the problem lies with the laws and loopholes that allow this to happen. Big companies spend a lot of money on lobbyists making sure that those loopholes do not get closed.

What may not be terribly patriotic are Apple, Google, Cisco, and other’s lobbying efforts against paying U.S. taxes on repatriating their overseas earnings. Apple currently has $74 billion overseas and a “tax holiday” on bringing that money and over $1 trillion from other companies back into the U.S. could cost the U.S. federal government $79B, according to the report. (Great Graphic at Bloomberg on why the $1 trillion holiday is likely going to happen.)

Apple responded to the NYT below:

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Unlocked iPhone 4S working in some T-Mobile USA’s network pockets, Apple smartphone utilizes HSPA+ 1900MHz spectrum

Although T-Mobil USA wrote in the September letter to customers that they were “interested in offering all of our customers a no-compromise iPhone experience,” the fact of the matter remains that the carrier’s network bands are not supported on the iPhone 4S.

T-Mobile’s 14.4 HSDPA (High-Speed Downlink Packet Access) GSM/UMTS network operates on the rather odd 1700/2100MHz frequency bands that are incompatible with iPhone 4S and other UMTS phones supported by standard 850/900/1900/2100MHz bands. However, some unlocked iPhone users are detecting 3G signals on parts of T-Mobile USA’s network utilizing the 1900MHz bands, according to Tmonews.com:

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