Apple allegedly saves almost S$3.5 billion in taxes after routing earnings to Singapore, says FT report

SINGAPORE: A recent report says that Apple was able to save US$2.7 billion (nearly S$3.5 billion) in taxes through booking a significant portion of its foreign profits in Singapore.

On Sunday (Nov 8), The Financial Times estimated that the tech giant booked up to US$50 billion (S$63.8 billion) in pretax profit in Singapore this year, US$10 billion more than in the year before.

Apple’s Singapore business sells products and services to overseas Apple companies, which means it earns part of the profit even before one of its products reaches consumers. These profits are booked in the city-state.

In Singapore, the headline corporate tax rate is 17%, whereas in the United States, it’s 21%. However, as the finance platform Moby pointed out, Singapore offers even more concessions for economically valuable companies, and so Apple’s effective tax rate in the city-state has been just 10% over the past two years.

For several years, Apple had relied on Ireland for shielding its earnings from high tax rates, but lately, has shifted to Singapore, which has helped it to save more. The company’s savings in Ireland for this year have come in at US$2.6 billion (S$3.3 billion), slightly lower than in Singapore. This was discovered after FT reviewed Apple’s recent filings and saw where the company’s profits had been booked.

“While Apple’s reliance on Ireland was first revealed more than a decade ago, the enormous tax savings in Singapore are a major revelation,” The Irish Times quoted Zorka Milin, the co-director of a Washington-based tax transparency group called the Fact Coalition, as saying.

Whether or not Apple will be routing more of its profits to Singapore over Ireland, its main tax base in Europe, remains to be seen. The tech giant made the news a while back after a controversy arose because Apple had negotiated special tax arrangements with the Irish government that allowed it to pay very little tax on enormous profits.

In 2016, the European Commission ordered Ireland to recover up to €13 billion in unpaid taxes from the company. After a protracted legal battle, the Court of Justice of the European Union, the EU’s highest court, confirmed that Apple had been granted unlawful state aid by Ireland. /TISG

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