SEC Concludes Review of Apple's Tax Policy, Asks for Additional Information for Investors

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.

subcommittee.jpg
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.

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All 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

jimthing Avatar
105 months ago
I keep hearing companies blamed for avoiding tax using perfectly legal tax avoidance methods.

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.
Score: 11 Votes (Like | Disagree)
furi0usbee Avatar
105 months ago
The problem is, well not a problem, because this is exactly what a corporation is supposed to do, is that as much as we all love Apple, like any company, their number one priority is to make a profit. If, along the way, customers are happy with the products, well that's a win-win.

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!
Score: 6 Votes (Like | Disagree)
ThunderSkunk Avatar
105 months ago
I look forward to the day the average citizen can use the Double Irish loophole to avoid paying taxes too. Shell corps in Belize all around!

How to pay for the USA? Sell the country to China! Easy.
Score: 6 Votes (Like | Disagree)
gatearray Avatar
105 months ago
SEC Clears Apple’s Tax Strategy
headline from AllThingsD

SEC finds Apple didn’t 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. :)
Score: 5 Votes (Like | Disagree)
skywalkerr69 Avatar
105 months ago
I have never had a problem with the language in any of their SEC filings. If you understand how to read a 10K, among other financial reporting reports, you will comprehend the language.
Score: 5 Votes (Like | Disagree)
Kaibelf Avatar
105 months ago
Corporation:

Oh look what our accountant did to help us increase profits and avoid tax, you might want to slip him some money to keep this gig legal though. But is it going to get us into legal trouble? No we've paid some politicians off, it's all been put there by out guys in government to help super large companies remain profitable in America (or any country for that matter) Ok that's Great!

Government:

People keep blaming us for the lack of tax money coming! We made too many big corp loop holes when they gave us big back handers. The Money helped us get elected though. do you think it's time we blame someone? Yeah lets pick some huge company and drag their share prices through the mud so we can devalue it and also warn the investors so they can play ball too and make some cash, we all win apart from everyone not in on it...

You, Me and Us:

What the heck my apple shares just went down, that seems suspicious. God damn my taxes have gone up! Ok where's the money going... lets blame the government they can't run the country properly if I pay this much in tax apple must be giving em loads, there should be tonnes of gov money out there. Ok The gov have run out of money WTF how!....Wait a sec the government can't be the bad guys they are saying it's all apples fault they didn't pay any tax. Thats not fair, they pay less per dollar than everyone i know apparently!

Lesson:

Apple, the government, etc are all crooks just like every corp ever created. They are the family bank balance run by numbers, lies and loop holes.

You can't run your life like a corp, they play by different rules and no one will ever be able to stop them. Know that you are actually supporting these theives in their criminal endeavours around the world and that anytime you can **** one over please do the balance is most righteously screwed.

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.
Score: 3 Votes (Like | Disagree)

Related Stories

General Apps Messages

Android iMessage Competitor Puts Pressure on Apple

Friday July 30, 2021 3:15 am PDT by
Google and the three major U.S. carriers, including Verizon, AT&T, and T-Mobile, will all support a new communications protocol on Android smartphones starting in 2022, a move that puts pressure on Apple to adopt a new cross-platform messaging standard and may present a challenge to iMessage. Verizon recently announced that it is planning to adopt Messages by Google as its default messaging...
iphone 13 teal with text

Apple Begins Preparation for iPhone 13 Production Ahead of Fall Launch

Monday June 28, 2021 3:29 am PDT by
We're just a few months away from when Apple is expected to reveal the 2021 iPhone, dubbed the "iPhone 13." In preparation for its launch, it has been pulling in shipments of different components needed to produce the new iPhones, according to a report from DigiTimes. In years past, Apple released its latest iPhone lineup, alongside a new Apple Watch, during a September event at Apple Park....
studio buds family

Beats Studio Buds Debuting Today With Active Noise Cancellation, Stemless Design, and More for $150

Monday June 14, 2021 8:00 am PDT by
We've seen a lot of teasers about the Beats Studio Buds over the past month since they first showed up in Apple's beta software updates, and today they're finally official. The Beats Studio Buds are available to order today in red, white, and black ahead of a June 24 ship date, and they're priced at $149.99. The Studio Buds are the first Beats-branded earbuds to truly compete with AirPods...
bluetti eb70 main

MacRumors Giveaway: Win a Bluetti EB70 Portable Power Station and 200W Solar Panel

Friday September 3, 2021 11:13 am PDT by
For this week's giveaway, we've teamed up with MAXOAK to offer MacRumors readers a chance to win a Bluetti portable power station and an accompanying solar panel. Bluetti makes a range of portable power station options that are useful for camping, emergencies, power outages, off-grid living, and similar situations. The Bluetti EB70 is a solid middle of the road option that offers 716Wh and...
apple privacy

Apple Publishes FAQ to Address Concerns About CSAM Detection and Messages Scanning

Monday August 9, 2021 1:50 am PDT by
Apple has published a FAQ titled "Expanded Protections for Children" which aims to allay users' privacy concerns about the new CSAM detection in iCloud Photos and communication safety for Messages features that the company announced last week. "Since we announced these features, many stakeholders including privacy organizations and child safety organizations have expressed their support of...
macos catalina legacy system extension alert

Apple Begins Warning Users That 'Legacy System Extensions' Won't Work With a Future Version of macOS

Wednesday March 25, 2020 9:53 am PDT by
Apple has shared a new support document that indicates kernel extensions — which it calls "legacy system extensions" — will not be compatible with a future version of macOS because they "aren't as secure or reliable as modern alternatives."System extensions are a category of software that works in the background to extend the functionality of your Mac. Some apps install kernel extensions, which...
General Spotify Feature

Spotify Pauses Plans to Add AirPlay 2 Support to iOS App [Update: Spotify Clarifies]

Friday August 6, 2021 9:07 am PDT by
See update at bottom of article Spotify this week confirmed that its plans to add AirPlay 2 support to its iOS app have been placed on indefinite hiatus. In an online discussion forum post, a Spotify representative said the streaming music service had been working on supporting AirPlay 2, but the company has paused the efforts "for now" due to "audio driver compatibility issues." The...
youtube apple tv

YouTube Discontinuing 3rd-Generation Apple TV App, AirPlay Still Available

Wednesday February 3, 2021 3:09 pm PST by
YouTube is planning to stop supporting its YouTube app on the third-generation Apple TV models, where YouTube has long been available as a channel option. A 9to5Mac reader received a message about the upcoming app discontinuation, which is set to take place in March.Starting early March, the YouTube app will no longer be available on Apple TV (3rd generation). You can still watch YouTube on...
os x mountain lion macs 16x9 2

Apple Makes OS X Lion and Mountain Lion Free to Download

Wednesday June 30, 2021 12:19 pm PDT by
Apple recently dropped the $19.99 fee for OS X Lion and Mountain Lion, making the older Mac updates free to download, reports Macworld. Apple has kept OS X 10.7 Lion and OS X 10.8 Mountain Lion available for customers who have machines limited to the older software, but until recently, Apple was charging $19.99 to get download codes for the updates. As of last week, these updates no...
Pixel Stand 23W 668x445

Google Pixel 6 Rumored to Support 23W Wireless Charging, Beating iPhone 12's MagSafe

Wednesday September 1, 2021 1:54 am PDT by
Google is rumored to be working on a new wireless charging stand that could deliver 23W of charging power to its upcoming Pixel 6 and Pixel 6 Pro phones, according to a leaked inventory image published by Android Police. Image via Android Police. If true, that would beat the iPhone 12's maximum 15W wireless charging speed (or 12W on ‌iPhone 12 mini‌) using Apple's MagSafe charger, and...