Apple will introduce new versions of iOS and OS X at its annual developer's conference.
SEC Concludes Review of Apple's Tax Policy, Asks for Additional Information for Investors
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 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.
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.
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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