Apple has found a way to save itself from paying taxes to the U.K., a new report out of the country claims.
Despite generating pre-tax profits of 68 million pounds ($103.6 million) during its last fiscal year that ended in September 2012, Apple didn't pay a single dime in taxes to U.K. authorities, The Financial Times reported Sunday, citing corporate filings with the U.K. government. In the prior year, Apple paid 11.4 million pounds.
So, how did Apple sidestep those taxes? According to The Financial Times, the company awarded millions in stock awards to employees. Since those awards are deductible, it was able to completely eliminate all of the taxes it would have been required to pay on its profits.
Apple, like most other major companies, has developed a slew of techniques to save itself from paying taxes worldwide. The company's efforts have drawn some fire in Europe where Apple funnels more than 80 percent of its operating income generated internationally into an Ireland-based subsidiary. In that market, the company pays a tax rate of just 0.05 percent -- much lower than tax rates in the countries where the sales are actually generated.
Earlier this year, congressional investigators documented Apple's ability to reduce its tax load by billions of dollars a year. All of the company's tactics were completely legal, but they helped the company save at least $74 billion in offshore cash from being taxed.
Despite criticism on that, Apple CEO Tim Cook has said his company has done nothing wrong and stated at the D11 Conference in May that Apple doesn't "use tax gimmicks."