How has Apple's tax strategy affected its net profit in recent quarters?

Apple's tax strategy, which includes shifting profits into tax havens and utilizing deferred tax payments, has had a significant impact on its net profit in recent quarters. Here's a detailed analysis:

1. **Impact on Net Income**: Apple's net income has shown fluctuations in recent quarters, with a notable increase from $14.74 billion in Q3 2024 to $21.45 billion in Q2 2025, and a further increase to $36.33 billion in Q4 2025. This upward trend suggests that Apple's tax strategy, along with other business strategies, has contributed to its increased profitability.

|code|Ticker|Name|Date|Net Income YoY|Net Income|market_code|
|---|---|---|---|---|---|---|
|AAPL|AAPL.O|Apple|2024 Q2|-2.16887417218543|2.3636E10|185|
|AAPL|AAPL.O|Apple|2024 Q3|7.881897288868769|2.1448E10|185|
|AAPL|AAPL.O|Apple|2024 Q4|-35.80763199163617|1.4736E10|185|
|AAPL|AAPL.O|Apple|2025 Q1|7.1175846208279285|3.633E10|185|

2. **Tax Avoidance and Profit Shifting**: Apple's primary strategy for reducing its U.S. tax bill is to shift its domestic profits into tax havens, a practice that allows the company to avoid paying U.S. taxes on these profits while paying very little in foreign taxes. This profit shifting, facilitated by a loophole in the tax code known as "deferral," has enabled Apple to maintain a low foreign tax rate, typically around 5.8%.
3. **Effectiveness of Tax Strategy**: Between 2008 and 2015, Apple earned $305 billion in pre-tax income, during which it paid a foreign tax rate of only 5.8%. This low rate was achieved by shifting a significant portion of its profits into its Irish subsidiaries, which were structured to minimize tax liabilities. This strategy has been effective in reducing Apple's overall tax burden.
4. **Comparison with Other Multinationals**: Apple's tax avoidance tactics are not unique among multinational corporations. Many companies use similar strategies to minimize their global tax bills. However, Apple's scale of offshore profits, amounting to $252.3 billion, and its ability to defer U.S. taxes on these profits until they are paid as dividends to the U.S. parent company, highlight the company's adeptness at navigating the international tax system to its advantage.
5. **Legal and Regulatory Challenges**: Apple has faced legal challenges over its tax practices, including a €13 billion tax bill in Ireland related to preferential tax arrangements. These challenges could potentially impact Apple's net profit if they lead to increased tax payments or changes in tax policy that affect the company's profitability.

In conclusion, Apple's tax strategy has likely contributed to its strong net profit performance in recent quarters by allowing the company to maintain a low tax burden while generating substantial profits. However, the company also faces risks and challenges related to tax compliance and regulatory scrutiny, which could impact its financial performance in the future.