Wednesday, May 15, 2013, 03:07 pm PT (06:07 pm ET)
Tim Cook to reportedly testify on offshore tax practices in Senate investigationApple CEO Tim Cook will reportedly give testimony to the U.S. Senate Permanent Subcommittee on Investigation pertaining to how the company deals with taxes, a much debated topic as Apple is thought to have about $100 billion in offshore funds.
While it was known that the Senate would be holding a hearing next week Tuesday, POLITICO is reporting that Cook himself will be present to give testimony, possibly answering questions in the same vein as those answered by representatives from Microsoft and HP.
The Senate hearing is a continuation of the panel's investigation into how the practice of keeping profits offshore affects U.S. taxes.
Large domestic corporations like Apple have taken to hoarding cash away from U.S. shores to avoid paying high tax rates on overseas earnings. For example, a recent analysts by The Wall Street Journal found 60 such companies held a combined $166 billion in earnings offshore in 2012. Under U.S. tax law, companies can effectively sidestep paying the government more than 40 percent of their annual profits by not repatriating the money.
Pointing to Apple's huge offshore cash pile, the company chose to take on debt by issuing bonds to finance a planned stock buyback, despite having $150 billion in cash and equivalents. This tactic will allow Apple to avoid an estimated $9.2 billion tax hit if it were to bring the money needed for the buyback into the U.S.
According to the publication, representatives from the Treasury Department, Internal Revenue Service and other tax experts will testify at the hearing. According to the subcommittee's website, a full witness list, which would include Cook if today's report is accurate, will be published on the Friday.
On Topic: General
- Apple CEO Tim Cook to appear at WSJDLive conference in October
- Apple chose to handle iOS 8 rollout with own content delivery network
- Apple invents bone conducting EarPods for better iPhone noise cancellation
- Tim Cook touts new Apple privacy policies in open letter to customers
- Tim Cook explains consolidation at Apple in new interview