Apple Releases Statement Ahead of Tim Cook's Senate Appearance on Tax Policy

Apple today released a statement [PDF] ahead of Apple CEO Tim Cook, CFO Peter Oppenheimer, and head of tax operations Phillip A. Bullock's appearances in front of the U.S. Senate Permanent Subcommittee on Investigation tomorrow.

In the seventeen page statement, Apple notes that it has created hundreds of thousands of jobs in the United States -- both directly and through suppliers and contractors. It notes that the company paid nearly $6 billion in federal taxes in fiscal 2012 and the company expects to pay $7 billion in 2013.

The company also says Apple "does not use tax gimmicks", pushing back against reporting in The New York Times that examined Apple's international tax strategies.

Subcommittee

Apple, a California company, employs tens of thousands of Americans, creates revolutionary products that improve the lives of tens of millions of Americans, and pays billions of dollars annually to the US Treasury in corporate income and payroll taxes. Apple’s shareholders – from individuals and institutions to pension funds and public employee retirement systems – have benefitted from the Company’s success through the appreciation of its stock price and generous dividends. Apple safeguards the capital entrusted to it by its shareholders with prudent management that reflects the Company’s extensive international operations. Apple complies fully with both the laws and spirit of the laws. And Apple pays all its required taxes, both in this country and abroad.

Apple reiterates repeatedly that all of its financial activities are fully legal and in the best interests of its shareholders. The company says it supports comprehensive reform of the U.S. corporate tax system, instead proposing a new system that is "revenue neutral, eliminates all tax expenditures, lowers tax rates and implements a reasonable tax on foreign earnings that allows free movement of capital back to the US." Apple notes that this would likely result in the company paying even more in corporate tax, but supports it nonetheless.

The document includes an extensive history of the company, as well as fairly extensive details about Apple's corporate structure and tax practices, including details about Apple's sales and use tax payments ($1.3 billion in FY2012), state income tax payments ($830 million), and Apple's contributions to employer payroll taxes ($327 million).

It lays out Apple's network of foreign subsidiaries, including several located in Ireland which distribute 'active foreign, post-tax income as dividend payments within Apple's foreign corporate structure'.

Apple wants to make clear to the Subcommittee that the Company does not use its Irish subsidiaries or any other entities to engage in the following tax practices that were the focus of the Subcommittee’s September 20, 2012 hearing, entitled Offshore Profit Shifting and the US Tax Code. Specifically, Apple does not move its intellectual property into offshore tax havens and use it to sell products back into the US to avoid US tax, nor does it use revolving loans from CFCs to fund its domestic operations. Apple does not hold money on a Caribbean island, does not have a bank account in the Cayman Islands, and does not move any taxable revenue from sales to US customers to other jurisdictions in order to avoid US taxation.

The statement continues in some detail, examining Apple's various international holdings and how the company uses them to fund international expansion of retail stores and other investments.

It also notes that analysis of its decision to issue $17 billion in debt to fund share repurchases and dividends, rather than repatriating foreign earnings, "was in its shareholders' best interests".

Apple CEO Tim Cook and CFO Peter Oppenheimer will appear at 9:30AM Eastern time in front of the U.S. Senate Permanent Subcommittee on Investigation. The hearing, titled "Offshore Profit Shifting and the U.S. Tax Code - Part 2" will be in the Dirksen Senate Office Building. The subcommittee is attached to the U.S. Senate Committee on Homeland Security and Government Affairs.

Other witnesses at the hearing include tax policy experts from the IRS and the Department of the Treasury, as well as professors from Harvard and Villanova.

Note: Due to the political nature of the discussion regarding this topic, the comment thread is located in our Politics, Religion, Social Issues forum. All MacRumors forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Top Rated Comments

(View all)
Avatar
97 months ago

In the seventeen page statement, Apple notes that it has created hundreds of thousands of jobs in the United States -- both directly and through suppliers and contractors. It notes that the company paid nearly $6 billion in federal taxes in fiscal 2012 and the company expects to pay $7 billion in 2013.


Meanwhile, Google pumps billions into Korean corporate coffers with its "free" mobile OS development, turning Samsung into the singlemost dominant mobile electronics provider in the world.

Yet I'm supposed to cheer for Google and not Apple. Not happening.
Score: 11 Votes (Like | Disagree)
Avatar
97 months ago

Apple needs to start caring about America and creating domestic jobs.


I thought they already have tens of thousands of jobs here? Are you saying they should stop operations overseas altogether?

Nothing is more American than a capitalist company, and Apple is a prime example of a capitalist company
Score: 11 Votes (Like | Disagree)
Avatar
97 months ago

Meanwhile, Google pumps billions into Korean corporate coffers with its "free" mobile OS development, turning Samsung into the singlemost dominant mobile electronics provider in the world.

Yet I'm supposed to cheer for Google and not Apple. Not happening.


Yes, funny how all these "patriots" seem to constantly pick apart their American company while constantly bolstering a Korean conglomerate with questionable practices both in Korea and abroad. And Apples the "unpatriotic" one? Irony at its finest.
Score: 10 Votes (Like | Disagree)
Avatar
97 months ago

Apple needs to start caring about America and creating domestic jobs.


All American tech companies need to do this.
Score: 7 Votes (Like | Disagree)
Avatar
97 months ago
Bottom line: This is not Apple's problems. It is the governments' problems. Apple is doing what's right.
Score: 6 Votes (Like | Disagree)
Avatar
97 months ago

Well, there you have it. Apple officially stated it doesn't not evade taxes using the "Double Irish Dutch Sandwich".

Do we believe them?


I think Apple is very aware that they are under an intense amount of scrutiny from almost every angle, so they're playing pretty much everything as straight as possible. I really doubt that Tim and Peter would go and lie in front of congress. Apple gets headlines for merely having magnets in their products; imagine what lying about their taxes would do.
Score: 5 Votes (Like | Disagree)

Top Stories

iPhone 12 Pro in Graphite and iPhone 12 in Blue Shown Off in Unboxing Videos

Monday October 19, 2020 8:20 am PDT by
While the iPhone 12 Pro does not launch until Friday, we now have an early unboxing video of the device courtesy of Twitter account DuanRui, providing a closer look at the shiny new flat-edge design and sleek Graphite color option. Ben Geskin re-uploaded the unboxing video to YouTube, which we've embedded below: Geskin has also uploaded an unboxing video of the iPhone 12 in Blue: ...

New Photos Offer Better Look at iPhone 12 Color Options

Tuesday October 20, 2020 2:34 am PDT by
As we wait for the iPhone 12 review embargo to lift later today, more pictures are circulating of the devices in real-world lighting conditions, providing a better look at the different colors available. Leaker DuanRui has shared images on Twitter of the iPhone 12 in white, black, blue, green, and (PRODUCT)RED. The black and white colors are similar to the iPhone 11 colors, but the other...

Kuo: iPhone 12 Pro Demand Higher Than Expected

Sunday October 18, 2020 10:39 pm PDT by
TF International Securities analyst Ming-Chi Kuo released a research note this morning detailing what he's seen with the volume of iPhone 12 and iPhone 12 Pro pre-orders in the first weekend of sales. Kuo had previously indicated that Apple's estimated shipment allocations for the new iPhone models placed the iPhone 12 at the top with 40-45% of inventory allocation (up from 15-20%). However, ...

Apple Releases iPadOS and iOS 14.1 With Multiple Bug Fixes Ahead of iPhone 12 Launch

Tuesday October 20, 2020 10:06 am PDT by
Apple today released iOS and iPadOS 14.1, the first major updates to the iOS and iPadOS 14 operating system updates that were released in September. iOS and iPadOS 14.1 come a week after Apple released the golden master versions of the updates to developers. The iOS 14.1 update can be downloaded for free and it is available on all eligible devices over-the-air in the Settings app. To access...

Hands-On With Apple's MagSafe Charger for iPhone 12

Monday October 19, 2020 11:54 am PDT by
Alongside the new iPhone 12 models, Apple introduced a MagSafe charger that attaches to the back of the iPhones using magnets embedded both in the charger and in the iPhone. It allows for speedier charging and paves the way for a portless iPhone in the future. MagSafe chargers are shipping out and are in some Apple retail locations now, and we picked one up to check it out. Subscribe to the ...

Watch: iPhone 12 and iPhone 12 Pro Unboxing Videos and First Impressions

Tuesday October 20, 2020 6:05 am PDT by
Apple's embargo has lifted for iPhone 12 and iPhone 12 Pro reviews. In addition to our detailed review roundups for each device, we've rounded up over a dozen unboxing videos and first impressions below. iPhone 12 in Blue on left and iPhone 12 Pro in Pacific Blue on right via Engadget Key new features of the iPhone 12 and iPhone 12 Pro include a flat-edge design, 5G support, a much faster A14 ...

Some Apple Watch SE Owners Experiencing Issues With Overheating [Updated]

Monday October 19, 2020 11:38 am PDT by
There may be an issue with the new Apple Watch SE, which some users have found is overheating after a few hours of usage. Several Apple Watch SE owners in South Korea have run into problems, as noted in a Reddit post chronicling the complaints. There have been six reports from Apple Watch SE owners in South Korea who have had their Apple Watches get hot and malfunction, with a yellow spot...

Gold Version of iPhone 12 Pro Apparently Has a More Fingerprint Resistant Stainless Steel Frame

Tuesday October 20, 2020 11:56 am PDT by
iPhone 12 Pro reviews hit the web today, and one of the more interesting tidbits came from TechCrunch's Matthew Panzarino, who revealed that the Gold version of the device apparently has a more fingerprint resistant coating applied to the stainless steel frame. From his review:Most of the iPhone 12 Pro finishes still use a physical vapor deposition process for edge coating. But the new gold...

iPhone 12 Pro Max Has Smaller 3,687 mAh Battery According to Regulatory Filing

Tuesday October 20, 2020 8:48 pm PDT by
Apple's new iPhone 12 Pro Max is equipped with a 3,687 mAh battery, which is around 7% less capacity than the 3,969 mAh battery in the iPhone 11 Pro Max, according to a regulatory filing published by TENAA, the Chinese equivalent of the FCC. The regulatory filing, spotted by MacRumors, also lists the iPhone 12 Pro Max with 6GB of RAM as seen in benchmark results last week. Apple has filed ...

Hands-On With Apple's iPhone 12 and 12 Pro MagSafe Cases

Tuesday October 20, 2020 1:33 pm PDT by
Apple's iPhone 12 and 12 Pro are launching this Friday, and ahead of that release date, Apple is shipping out various accessories like the MagSafe charger and MagSafe cases. Yesterday we took a look at the MagSafe charger, and today our MagSafe case came in the mail, so we thought we'd take another look at the charger to see how it works with the case and just how strong the case magnets are. S ...