Apple Doesn’t Pay Tax on iTunes Revenue Outside North America

Apple Doesn’t Pay Tax on iTunes Revenue Outside North America

Documents acquired by The Australian Financial Review show that Apple isn’t paying taxes on more than 2/3 the money iTunes makes outside North America. Revenue from the sale of music and films outside the U.S. go through the company’s Luxembourg holding company iTunes Sàrl, where the money isn’t under the jurisdiction of the United States government.

iTunes Sàrl’s turnover rose from $508 million in 2009 to $2.5 billion in 2013, and the holding company allows Apple to log the iTunes sales across the EMEA (Europe, the Middle East and Africa) as sales through Luxembourg. The company set up in Luxembourg because of the favorable taxes, and since the purchases are downloads and not tangible objects, if the transaction goes through Luxembourg it’s logged as a sale in that country. Apple has also created subsidiaries in other low-tax countries including the British Virgin Islands and Ireland to pay less than 1% tax on the U.S. holding company of iTunes Sàrl.

As Apple’s already saving so much money, it’s frustrating they’re looking to screw musicians and labels by cutting music prices even further.

[h/t FACT]