Apple’s revenue exceeds the GDP of most countries!

We all know that Apple is one of the richest corporations in the world. In phrases of revenue, the iPhone maker earned an astounding $119.58 billion final quarter alone. But it may be laborious to understand the scale of this quantity. After all, even a single billion is an unfathomable quantity that most of us don’t have a lot expertise with. Let’s put that determine into some perspective then: Apple’s 2023 revenue surpasses the financial output of greater than 75% of international locations.

First, it’s value noting that I’m not speaking about Apple’s market cap right here. That metric presently stands at round $3 trillion, however it’s intently tied to the firm’s inventory value. Instead, we’re involved with Apple’s revenue or the quantity of cash it makes from promoting items and providers. And in that respect, it eclipses different tech giants and even medium-sized economies.

In 2023, Apple’s annual revenue amounted to $383.29 billion. And based on GDP knowledge from the International Monetary Fund (IMF), that determine would slot Apple into the forty first place if it have been a rustic, proper between Hong Kong and South Africa. In truth, Apple data increased revenue than the GDP of developed nations like New Zealand, Finland, and Portugal, not to mention smaller ones like Bulgaria, Lithuania, and oil-rich Qatar. The backside line is that Apple’s revenue places it forward of most international locations’ GDP.

Of course, an organization’s revenue isn’t instantly corresponding to a rustic’s GDP, as the latter additionally measures shopper spending and exports along with manufacturing. Still, it offers some perception into simply how massive Apple has change into. And that’s earlier than we dissect the firm’s earnings to seek out how a lot it makes from promoting {hardware} versus software program.

According to Apple’s newest investor disclosure paperwork, the firm made $85.2 billion from providers alone in 2023. This contains digital purchases, starting from singular App Store purchases to month-to-month streaming subscriptions like Apple TV Plus. Here’s one other enjoyable truth: Apple makes more cash from providers than it does promoting Mac and iPad {hardware} mixed! Both of these introduced in simply $57.6 billion final 12 months.

Apple has some of the widest distribution networks of nearly any firm, which implies it has to take care of worldwide foreign money fluctuations and differing company tax charges. Since most of us don’t take care of worldwide taxes frequently, it’s straightforward to think about that Apple transfers most of its earnings again house to its HQ in Cupertino. However, the firm doesn’t try this in any respect.

The US has a company earnings tax price of 21% as of late — it was a lot increased till Trump signed the Tax Cuts and Jobs Act in 2017. That legislation additionally allowed Apple to repatriate its abroad money at a diminished price of 15.5% briefly. The iPhone maker took that one-time alternative to carry again $252 billion from its offshore subsidiaries into the US.

Fast ahead to 2023, nevertheless, and Apple nonetheless solely paid an efficient tax price of 14.7% on its worldwide earnings. That’s decrease than 21% and positively lower than the private earnings tax price in most international locations.

This is feasible as a result of Apple has established a nexus of subsidiary corporations, many of that are situated in favorable tax regimes. In international locations the place the tax price is increased, the native entity will then pay these overseas subsidiaries for intangible providers like use of the Apple trademark and brand.

For instance, Apple can dictate that its German division should pay the firm’s subsidiary in Ireland a “service fee” for offering technical help or different intangibles. In doing so, Apple doesn’t document any taxable earnings in costly geographies and funnels its earnings into extra tax-efficient jurisdictions as a substitute.

In the previous, Apple relied closely on Ireland with its significantly decrease tax price together with a loophole known as the “Double Irish with a Dutch sandwich.” However, the European Union pressured Ireland to repair the loophole and ordered Apple to pay 13 billion euros in backdated taxes in 2016.

Ever since then, Apple moved two of its key Irish subsidiaries’ tax residency to Jersey — a British Crown Dependency that maintains its personal tax legal guidelines. Apple has staunchly argued that it doesn’t evade taxes, however it’s clear as day that the firm has performed governments and their tax legal guidelines like a fiddle.