Taxes are put in place by the government, to allow them to fairly charge people in order for governmental projects and infrastructure upgrades. For corporate giants, who are trying to maximize their annual profits, taxes are just another added cost which gets subtracted from the company’s gross income. So in order to maximize many companies and individuals rely on ‘offshore accounts’: these accounts are located in banks of different countries which have low or no tax jurisdictions. For anyone trying to save money, it would make sense to dump your earnings into these tax-free accounts, while abiding to the law and not committing any financial fraud.

Apple CEO Tim Cook at Senate Hearing

As was the case for Apple, who successfully avoided paying tax on $74 billion through the use of off-shore entities as reported by The Economist.  Consequently, Apple’s CEO Tim Cook had a hearing with the Senate discussing how Apple utilized loopholes to avoid paying taxes. What Apple did was completely legal yet it makes the average person question the companies ethical values. Realistically as long as tax havens are still around, companies and individuals are going to rely on such practices to maximize efficiency and profit.

http://www.economist.com/blogs/schumpeter/2013/05/apples-tax-arrangements