The Ethical Issues Of Apple And Other Multinationals Essay

The Ethical Issues Of Apple And Other Multinationals Essay

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To mitigate the potential double taxation that may result from such a system, a foreign tax credit (FTC) is allowed for income taxes paid to foreign countries to reduce or eliminate the U.S taxes. Suppose Apple is taxed 15% in Italy, 20% would be taxed in the US to complete the 35% required tax rate. In order for the money to be taxed Apple would have to bring their cash to the US for saving, investing or to give out in dividends (IRS). Apple and other multinationals have been accused of unethical behavior because of their ability to take advantage of global opportunities.

The Ethical Issues
Apple is in accordance with the law but they have been criticized for their accounting practices. Ever since Apple set up its foreign operations in the 1980’s they have used an Irish subsidiary, AOI to shift foreign profits around to be taxed by no government agency. This is not a legal issue because no laws are broken but the ethicality of what Apple is doing is what is at question. The Government is the active stakeholder that is mainly concerned with the issue, by making public statements and by trying to negotiate with Apple. The Government may claim their concerns of doing the right thing, but at the end of the day they are concerned about the money that they are missing out on.
According to the European Commission’s Ireland alleged aid to apple, sales in the Apple sales international branch, AOI rose 415% between 2009 and 2012 adding up to 63.9 billion USD. This large sum of money is from operations all around Europe, none of which is taxed. Nothing about AOI suggests that it is critical for it to be held in Ireland. They are able to hold profits there by shifting intellectual property rights. Nearl...

... middle of paper ...

...les, or they can bring their money home and eliminate that risk.
If Apple decides to keep the Irish subsidiary, they need to continue their philanthropic activities and they need to make the public aware of them. Apple is an innovative company that changes peoples lives every day and they are active in giving to charity, this will help Apple emphasize a good public image. If the corporate tax rate changes, Apple needs to be the first multinational to bring their money home and they should work with the government to show exactly how the accounting method works to help prevent future issues with other multinationals. This issue has not reached the crises stage yet, but Apple should consider what they are going to do if people start to protest. They should try to keep negotiating with the government to reach an agreement so the issue does not reach a crisis situation

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