Profit shifting: Apple apparently saves $2.7 billion in taxes in Singapore

Dusseldorf. Apple has reduced its tax burden by $2.7 billion this year by booking profits through Singapore. This is reported by the “Financial Times” (FT), citing figures that Apple presented this week with its annual report. Accordingly, the company took advantage of tax incentives from the city state.

According to the report, the US technology group reported profits of up to $50 billion through its Asian center in 2026. In Ireland, where Apple has its European headquarters, the company saved $2.6 billion. Overall, according to the FT, the iPhone manufacturer avoided a good five billion dollars in taxes. If Apple had taxed its global profits this year at the US federal tax rate of 21 percent, it would have incurred around $33 billion.

Apple's largest Singaporean subsidiary is a sales and marketing center that sells products and services to Apple companies abroad and "develops intellectual property," according to its annual financial statements.

Across its two main Singaporean operations, Apple made pre-tax profits of about $9 million per employee in 2024, the FT says. The profits per capita in Singapore are significantly higher than in other countries where Apple has locations.

The shift in profits for Apple is made possible by, among other things, so-called profit shifting: Multinational companies can shift profits within their corporate structure to countries where the tax burden is lower. As a result of this shift, the company reports lower profits in the countries in which it produces or sells - and pays correspondingly fewer taxes there.

The most common method of profit shifting is for a multinational corporation to use a subsidiary in a low-tax country to charge costs to other subsidiaries in different countries. By moving software licenses to low-tax countries, it is often even easier for technology companies to reduce their tax burden in the countries with the most customers.

The Organization for Economic Cooperation and Development (OECD) has been trying to prevent tax avoidance for years. This led to a landmark tax reform in October 2021 in 136 OECD countries, which established an effective minimum corporate tax rate of 15 percent for large multinational companies. Ireland and Singapore also joined the OECD's anti-tax avoidance efforts.

Singapore has introduced the OECD rules for financial years from 2025. There is no trade tax there. The official corporate tax rate in Singapore is 17 percent, which is higher than the global minimum tax rate. However, companies can negotiate incentives that reduce the corporate tax rate.

New US federal accounting rules require Apple to disclose its taxation in Singapore. According to Apple's publications, the company benefits from agreements that reduce the corporate tax rate. The FT reports that Apple's effective tax rate in Singapore was around ten percent from 2023 to 2025.

Apple has previously come under fire for using offshore centers to reduce taxes. The company was forced to pay more than 13 billion euros in back taxes plus interest following a high-profile EU state aid investigation in 2016 that uncovered illegal tax advantages in Ireland.