Luxembourg official: Apple tax strategies not cheating

Georges Schmit, Executive Director, Luxembourg Trade and Investment Office, has penned the following letter to The New Yellow… er, York Times regarding their most recent poorly-sourced Apple hit-piece:

“How Apple Sidesteps Millions in Taxes” (“The iEconomy Series,” front page, April 29) suggests that Luxembourg-based iTunes S.à.r.l. is part of a grand scheme run by Apple to deprive the United States and European governments of billions of income tax dollars or euros. You assert that Luxembourg “has promised to tax the payments collected by Apple and numerous other tech corporations at low rates if they route transactions through Luxembourg.”

In the European Union, every iTunes customer, or customer of any other Luxembourg-based business to consumer e-service provider, pays value-added tax (VAT) — a consumption tax similar to the United States sales tax — at the same, lowest possible rate. This is not the result of these e-service providers’ intent to cheat the taxman. Rather, it is the consequence of a combination of these factors:

European indirect tax law applicable to cross-border business-to-consumer transactions in e-services.

A well-functioning E.U. internal market, which allows for cross-border trade of all e-services from a single location to all other 26 national markets.

The lowest tax rate in the applicable 15 to 25 percent range for standard VAT rates in the 27 European Union member states. So, iTunes S.à.r.l. collects 15 eurocents for every euro spent on iTunes services in VAT from each and every customer, wherever he or she is in the European Union.

Luxembourg and iTunes S.à.r.l. simply apply prevailing E.U. tax law in a well-functioning Internet-based E.U. single market.

Source: The New York Times

MacDailyNews Take: If The New York Times was honest, their front page would be completely covered in egg.

Related articles:
YouGov: Apple’s reputation tougher than GE’s based on recent tax avoidance ‘scandal’ – May 8, 2012
Republican Senator Coburn ‘livid’ over New York Times’ report about Apple taxes – May 1, 2012
Rush Limbaugh: New York Times targeting Apple; latest hit piece based on erroneous tax data – April 30, 2012
Does Apple know how to use its money better than the U.S. federal government? – April 30, 2012
Apple a bigger global power and more important than most nations – April 30, 2012
The New York Times blows it again: Incorrectly reports Apple’s tax rate – April 30, 2012
Apple to The New York Times: We are among the top payers of U.S. income tax – April 29, 2012
The New York Times: How Apple sidesteps billions in global taxes – April 28, 2012
The New York Times blows it, gets Apple CEO Tim Cook’s earnings spectacularly wrong – April 9, 2012


  1. Those talks are hypocrisy, since all of companies do tax optimisation and have companies in those regions with little or no taxes. Even media’s darling like Google. Absolutely every one of them.

    But NYT wants to be a tabloid, so they can not refrain themselves from manipulations.

  2. “How Apple Sidesteps Millions in Taxes””

    WHAT?!? That’s the NYTs link? The ORIGINAL headline was “how Apple sidesteps BILLIONS in taxes”!!! They’re already respinning their article?

  3. Oh come on! Of COURSE Luxembourg is going to say that. Luxembourg’s vast wealth has a lot to do their banking industry… which makes up 50% of their economy.

  4. “If The New York Times was honest, their front page would be completely covered in egg.”

    If The New York Times was honest, it wouldn’t be The New York Times.

  5. Of course an official from Luxembourg would say that, just like someone from the Cayman Islands would concerning taxes- or a state like Delaware relative to incorporation.

    If it’s not illegal it should be.

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