Woz: Apple should pay half its income in tax

The tax arrangements of international technology companies have been in the spotlight for a little while now. Few people disagree with the idea that they should be paying their way when it comes to tax, and one of these people is Steve Wozniak. He thinks Apple should pay tax at a rate of 50 percent -- just like him.

Just like Amazon, Facebook and Google, Apple manages to avoid a great deal of tax by channeling money through a subsidiary located in the Republic of Ireland. This reduces its tax bill dramatically by avoiding the UK corporation tax of 20 percent, and instead paying the Irish rate of 12.5 percent. Apple co-founder Woz feels the company should be paying the same rate that he has to.

Speaking on BBC Radio 5 Live, Wozniak said: "I don't like the idea that Apple might be unfair -- not paying taxes the way I do as a person. I do a lot of work, I do a lot of travel and I pay over 50 percent of anything I make in taxes and I believe that's part of life and you should do it". He says that when he set up Apple with Steve Jobs, it was Jobs who was interested in making money.

We didn't think we'd be figuring out how to go off to the Bahamas and have special accounts like people do to try to hide their money. But you know, on the other hand I look back any company that is a public company, its shareholders are going to force it to be as profitable as possible and that means financial people studying all the laws of the world and figuring out all the schemes that work that are technically legal. They're technically legal and it bothers me and I would not live my life that way.

After Google was criticized for striking a 'sweetheart' tax deal with the UK government, Apple now finds itself at the center of a European Commission tax inquiry. While there has been no question about whether the likes of Apple and Google have been acting legally or not, there is a marked difference between what is legal, and what is moral -- and, importantly, how tax arrangements are viewed by the public.

With Apple currently using tax shelters in not only Ireland, but also Luxembourg, the European Commission could soon be seeking to recoup as much as $8 billion in unpaid taxes. Wozniak, like many people, wants companies like Apple to be seen to be paying their fair share. With Apple having built up offshore reserves of billions of dollars which are untouchable by the US tax office, there's potential for a lot more money to be recouped as well.

It's a debate that is set to continue for some time to come. While Apple's tax arrangement may be completely legal, complying with the letter of the law and embracing the spirit of it are two very different beasts. Google, Amazon and Facebook have already set something of a precedent by admitting liability for previously unpaid taxes and agreeing to either make back payments or future payments. Apple will almost certainly be waiting for the outcome of the European Commission's investigation, but it's hard to imagine that the company won’t be obliged to dip its hand into its coffers.

Just don't expect the tax bill to hit 50 percent just yet, Woz.

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