Following several months of investigation, the Securities and Exchange Commission (SEC) has concluded its review of Apple’s finances and opted not to take any action against the company at the current time, reports AllThingsD.
While the SEC has ultimately decided that Apple's disclosures are sufficient, it has asked Apple to improve the language of its SEC filings to make it easier for investors to understand the risks of its tax strategies. As noted by The Wall Street Journal, Apple has agreed to provide the information, detailing the names and tax rates of the countries where it maintains foreign cash.
Apple Inc. will give investors more information about its overseas cash and related tax policies, following a review by the Securities and Exchange Commission over the summer, according to correspondence released Thursday.
The SEC demanded additional disclosures about Apple’s fiscal–2012 annual report, including “a more tailored discussion” of risks associated with Apple’s tax structure.
It also asked Apple to detail the names and tax rates of the countries where Apple houses its foreign cash.
The investigative conclusion by the SEC comes after much scrutiny from the U.S. Senate Permanent Subcomittee on Investigations this past summer, which claimed Apple avoided paying $74 billion in taxes between 2009 and 2012 through the use of international subsidiaries and complicated tax strategies.
Apple CEO Tim Cook, CFO Peter Oppenheimer and Head of Tax Operations Phillipp A. Bullock all appeared in front of the subcomittee on Capitol Hill in May, with the company releasing a statement prior to the hearing about its international and financial operations. During his testimony, Cook told the senate that Apple pays all of the taxes that it owes in the country.
In April, Apple borrowed $17 billion in a bond offering, in part to return cash to shareholders without bringing a portion of its $100 billion overseas to the United States. While Apple holds approximately $145 billion in cash and investments, roughly two-thirds of that money is currently held in foreign countries and would be subject to significant taxes if it were to be returned to the United States, with the bill estimated to have been at $13 billion if it were enforced.
Apple told the SEC that it plans to use its foreign cash to invest abroad, creating additional Apple Stores overseas, expanding its iTunes Store, and boosting its international marketing.
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Top Rated Comments
I wish people would BLAME THE GOVT, if they want to bitch about it. The GOVT set the rules in place, so it's the govt's fault if companies then follow their laws!
Same crap with the Public Accounts Committee here in the UK bloody politicians blaming the big companies for avoidance, in order to make their own political careers, rather than actually doing something to change the laws these companies (and any other company that they compete with!) has to follow.
...of course the political subcontext is, they know they cannot change the tax laws, without forcing more and more large companies to go to tax shelters anyway. So it's really all a petty-politics merry-go-round that'll achieve absolutely nothing; you watch.
Do I think Apple is doing anything illegal? From everything they have said either in public or in front of congress, no. Do I think they are using every loophole and pushing every limit they can? Yes, but that's what a corporation is supposed to do.
Of course for the people who hate Apple for X, Y, and Z, this looks extremely shady. And when Apple says they are using this money to invest overseas... if the truth is 100% of a statement, the true part of that statement is probably 5% true... maybe.
The ONLY reason Apple keeps that money overseas is to avoid paying taxes, and if they could funnel 100% of US profits overseas to avoid taxes, they would. TC said he was open to paying some taxes on repatriation of cash, but the truth is, he would also prefer to pay ZERO taxes. But he couldn't say that in front of television cameras.
I really don't like it when people talk patriotism about corporations. Apple could be really patriotic and make all their stuff over here. But they would be more patriotic than profitable. Apple, like every company on Earth, if you presented them with a business model of the highest quality products, with the lowest cost of manufacture (wages/materials/etc.), they all would be making their stuff in some third-world country.
Funny though, nobody here would have money or a job to pay for all that stuff. So greed has a tipping point too!
How to pay for the USA? Sell the country to China! Easy.
headline from AllThingsD
SEC finds Apple didnt create the Holy Grail of tax avoidance after all
headline from 9to5mac
and here on MacRumors...
SEC Concludes Review of Apple's Tax Policy, Asks for Additional Information for Investors
Quite an interesting difference in the spin, one of these headlines sounds like it was written by an android user. :)
Whine whine whine. Yet not a single word explaining why Apple should pay America taxes on products that are manufactured, distributed, and sold wholly overseas, and which are already taxed in the place of purchase. Sorry, but as an American, I accept that I won't magically have the right to tax everything that happens in other countries.