Apple’s strategy seems to have paid off once again. The multinational with a capitalization of 2.200 billion euros would have paid only 4 million euros in taxes in France in 2021… According to information reported by Challenges, on Monday June 13, the apple brand did not indeed paid only a few million euros on the activity of its Apple stores in France. This level of taxation is linked to the results of the subsidiary of Apple in France which manages the sales activity in the brand’s store.
However, Apple seems to be experiencing a drastic drop in its turnover in France while its sales are increasing. The latter rose from 708 million euros in 2020 to 565 million in 2021, while the apple brand has never sold so many products in France. In reality, Apple would have developed a very effective tax optimization strategy allowing it to limit its taxes in France. Nothing very new, the brand having already been singled out for paying very little tax in the countries where it is present. To put it simply, the company manages so that the bulk of its activities in France are taxed in Ireland where its European headquarters are located.
To achieve such a low level of taxation, Apple took advantage of a reorganization put in place during the pandemic. “Some of the employees of the stores, which have long remained closed, changed jobs during this period. […] they answered calls in France and made sales by telephone”, explains Albin Voulfow, representative of the CFDT union of the company, to Challenges. However, Apple’s Internet sales, like sales made by telephone, are declared by the Irish subsidiary, a country which has very advantageous taxation for digital technology giants.
This accounting sleight of hand explains why Apple can continue to see its sales increase in France while at the same time the firm declares declining results – while only paying France a few million euros in taxes.
And we’re talking about the Gafa Tax
The digital giants are taking full advantage of the dematerialization of their activities to reduce their taxes. Because even if the Gafa (Google, Apple, Facebook, Amazon), and more broadly the multinationals of the digital economy are deployed in different sectors, they have a common characteristic: to offer their services on the web allows them to locate their headquarters social media in a different country from where their users are located.
Such a low level of taxation can only revive the debate on the famous digital tax. This would impose on all firms generating a turnover of at least 750 million euros, a tax of 15% which the companies in question will no longer be able to escape. Except that the implementation of this tax is slow to materialize. According to the latest news, the OECD is considering the implementation of the digital tax at the global level, at best in 2024.
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