Kevin Bostic
Tim Cook is going to Washington to talk taxes and overseas cash holdings, and the Apple CEO is heading to the hill with a message: We pay every dollar that we owe.
Cook will testify in front of the Senate Permanent Subcommittee on Investigation on Tuesday, and the Apple chief spoke with Politico ahead of the hearing. Cook defended Apple's conduct, saying that the iPhone maker is operating well within the rules with regard to taxes, referring to a a massive overseas cash hoard.
"I can tell you unequivocally," Cook said, "Apple does not funnel its domestic profits overseas. We don't do that. We pay taxes on all the products we sell in the U.S., and we pay every dollar that we owe. And so I'd like to be really clear on that."
As of March 30, Apple held $102.3 billion in cash overseas, up 24 percent from the end of September 2012. The company cannot bring those funds back ashore without paying corporate taxes on them.
Apple's cash conundrum came to a head over the past few months, as investors — dissatisfied with slowing revenue growth and a declining stock — called for the company to turn some of its overseas holdings into a bigger dividend. Apple eventually circumvented the tax issue by taking on $17 billion in debt. That move, the firm's first bond offering since 1996, allowed apple to fund billions in cash returns to investors while avoiding the $9.2 billion it would have paid had it brought its overseas cash home.
Apple isn't alone among large corporations in keeping its money off American shores. A recent analysis found that Apple was holding about $40 billion in untaxed earnings in countries with a more favorable tax structure, such as Ireland. Google and Amazon are among the other tech giants that have done just the same for tax purposes.
Some of the senators before which Cook will find himself are quite ready to tear into Apple, even if the hearing is unlikely to result in any actionable legislative initiatives. Senator Carl Levin (D-Mich) called the entire tech industry to task for its tax avoidance, while Oklahoma's Sen. Tom Coburn (R) has previously said he was "livid" at Apple's tax actions.
Cook may parry such criticisms by pointing to Apple's impact on the American economy. The company employs 50,000 workers in all 50 states, and its actions have created another 550,000 jobs in manufacturing and software development. Cook will also likely note the company's $100 million investment in domestic manufacturing, with a U.S.-built Mac expected to roll off production lines this year.
In addition to the United States, Apple has come under fire in both Britain and Spain for practices that allow it to slip past tax regulations. A British report last year said that Apple pays about half the taxes it should by basing its operations out of Ireland.
A similar report from Spain's El PaÃs showed Apple routing 99 percent of its spanish sales through its Irish subsidiary. The iPad maker paid about 2.6 million euros in taxes for the year. Spanish Apple Store sales were up 86 percent.
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Charles Martin
Malcolm Owen
William Gallagher
Christine McKee
Wesley Hilliard
132 Comments
Apple is using every loophole and trick known to Wall Street and leveraging offshore accounts to "pay every dollar they owe" which is very little. They used loopholes to pay dividends.
Now, I'm all for business and pro-business but this Apple corporate tax dodging highlights a big problem where average working people like me pay the most into the system
http://www.huffingtonpost.com/2012/04/17/apple-corporate-income-tax-rate_n_1429955.html
Give an accountant rules and he will find a way to maximize profits without breaking those rules. Change the rules and companies will change the way they do business.Apple is not unique.
I respect Cook for getting out there, taking the heat, and putting himself in the spotlight instead of getting another executive to do the talking.
Apple is using every loophole and trick known to Wall Street and leveraging offshore accounts to "pay every dollar they owe" which is very little. They used loopholes to pay dividends.
Now, I'm all for business and pro-business but this Apple corporate tax dodging highlights a big problem where average working people like me pay the most into the system
http://www.huffingtonpost.com/2012/04/17/apple-corporate-income-tax-rate_n_1429955.html
Your point? Every single major corporation will use every single loophole available, as long as it's legal. Its what they pay their legal and accounting teams to do. Any company that does not do so is negligent. Yet you want Apple to cripple itself willingly, and pay a higher share of taxes than other corporations..because? You want Apple to play by rules that no other corporation plays by, just to give more money away?
Oh, and I'm pretty sure you don't pay "the most"-whatever the hell that means. Apple one of the largest US corporate tax payers in existence. The US gvt gets BILLIONS annually in revenue from them.
So just to keep track with what's currently expected to Apple from analysts and investors- they need to sell MORE units, at CHEAPER prices, while making MORE profit, MORE margin, and paying MORE taxes. Got it.
Apple is using every loophole and trick known to Wall Street and leveraging offshore accounts to "pay every dollar they owe" which is very little. They used loopholes to pay dividends.
Now, I'm all for business and pro-business but this Apple corporate tax dodging highlights a big problem where average working people like me pay the most into the system
http://www.huffingtonpost.com/2012/04/17/apple-corporate-income-tax-rate_n_1429955.html
If you would have substituted "Many corporations" for "Apple" I might have taken your comment seriously, but you didn't so that makes you nothing more than an ignorant troll.