Apple’s global supply chain flow choices and tax impact

An article in the New York Times (May 2,2012) describes choices made by Apple in the organization of its product flows to avoid taxes. Apple’s distibutors in Germany are called “commissionaires” and do not take possession of inventory. Thus German sales are booked in Singapore and avoid German retail taxes. Similarly, Apple’s Double Irish strategy books patent royalties to its manufacturing location in Ireland, then allocates pat ownership of the Irish location to a subsidiary in the Virgin Islands to avoid taxes, then flows profits through the Netherlands given European treaties. Given these global supply chain flows follow legal means, is Apple’s tax avoidance strategy an effective supply chain practice or something that should be disallowed ? Is the link between global plant location and flows and associated taxes something that will impact plant location decisions ? Is the claim that digital goods flow easily across national borders reason enough to permit such supply chain adjustments ?

Advertisements

About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s