Apple's Global Tax Strategy: Cost Sharing Agreement and Tax Residency Loopholes

Business Project
Analysis
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INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
What is the single most important element of Apple’s global tax strategy?..........................3
Why do most of Apple’s businesses in Ireland not have a country of tax residence?...........4
Why does Apple Operations International (AOI)— the Irish subsidiary that captures most of
Apple’s global profits outside the Americas—not pay taxes to Ireland or the United States?5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6
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INTRODUCTION
Apple is a multinational technology company which is having specialisation in computer
software, consumer electronics and online service (Haines, 2021). This report include discussion
upon the single most important element of Apple Global tax strategy and the reason of Apple
business in Ireland do not have a country of tax residency.
MAIN BODY
What is the single most important element of Apple’s global tax strategy?
Apple is performing its business operation as an American multinational technology organisation
which is having specialisation in computer software, consumer electronics and in online services.
This is one of the largest information technology company and is world's most valuable
organisation. It has been identified that Apple was founded in the year 1976 by Steve Jobs, Steve
Wozniak and Ronald Wayne. This company headquartered in California, United States and have
516 retail stores by the year 2021. This organisation offer its products and services worldwide. It
has been identified that main products of company include iPad, iPhone etc. Taxation plays
important role for organisation especially for those who are operating its services worldwide. n
addition to this it has been underlined that taxation is vital for companies as it helps them to
contributes towards society around the world (Khan Niazi and Krever, 2021). If business
organisation is moving beyond borders in this it is essential for them to make sure that they have
transparent and non discrimination taxation system within organisational workplace structure,
which not only helps them to perform business operations in transparent manner but also benefits
them in terms of investment flow open trade and more.
As per the case study analysis it has been identified that the single most important form of
element which is identified from the Apple Global tax strategy is cost sharing agreement. It has
been evaluated from the given case study that effective organisation global strategy aimed to
reduce the tax expense with the help of incorporating their subsidiaries in lower tax rate
countries for example Ireland. In addition to this it has been identified from the case study
evaluation that cost sharing agreement is mainly acts as an agreement between Apple Inc. and
AOI in Ireland. This duly identifies that research and development cost is duly shared on the
basis of global sales of the product. Furthermore, from the evaluation of respective case study it
has been identified that this strategy plays important as well as effective role for Apple as with
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