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

(View all)
Avatar
85 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)
Avatar
85 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)
Avatar
85 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)
Avatar
85 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)
Avatar
85 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)
Avatar
85 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)

Top Stories

Apple Acquires Weather App Dark Sky

Tuesday March 31, 2020 10:22 am PDT by Juli Clover
Apple has acquired weather app Dark Sky, Dark Sky's developers announced today. Dark Sky is one of the most popular weather apps on the App Store, known for its accuracy and storm warnings. Our goal has always been to provide the world with the best weather information possible, to help as many people as we can stay dry and safe, and to do so in a way that respects your privacy. There is no ...

Seemingly Unreleased Version of Logic Pro X With Live Loops Appears on Apple's Education Site [Updated]

Sunday March 29, 2020 7:23 am PDT by Hartley Charlton
Update: Apple has replaced the Logic Pro X image with an older version. Original story follows. A seemingly unreleased version of Logic Pro X has appeared on Apple's education site, as spotted by a Reddit user. The image from Apple's education products page shows a 16-inch MacBook Pro running Logic Pro X, but with a familiar interface that looks extremely similar to GarageBand's Live Loops ...

Bloomberg: Apple's 5G iPhone Still on Schedule for Fall Launch, But Future Products Could Be Delayed

Monday March 30, 2020 2:40 am PDT by Tim Hardwick
Apple's 5G iPhone is still on track to launch within the company's typical annual fall release schedule, according to a new Bloomberg report on filed on Monday. Signs are that Apple's Chinese-centric manufacturing -- of which Hon Hai is the linchpin -- is slowly getting back on track. The next iPhones with 5G wireless capabilities remain on schedule to launch in the fall, partly because mass...

Case for Upcoming Low-Cost iPhone Shows Up at Best Buy With Alleged April 5 Stock Date

Monday March 30, 2020 4:25 pm PDT by Juli Clover
Apple has a new low-cost iPhone in the works, which is supposed to be launching sometime in the first half of 2020. Given the ongoing situation in the United States and other countries, it's been unclear if the device is going to launch within the planned timeline, but there are signs that it could be coming soon. We started seeing cases for the new low-cost iPhone back in early February,...

Testing Brydge's New Pro+ Keyboard With Trackpad for iPad Pro

Monday March 30, 2020 2:04 pm PDT by Juli Clover
Well ahead of when Apple introduced trackpad support in iOS 13.4, Brydge announced an iPad Pro keyboard with a built-in multi-touch trackpad. We have one of Brydge's new Pro+ keyboards on hand, and thought we'd check it out to see how it works with Apple's new 2020 iPad Pro models. Subscribe to the MacRumors YouTube channel for more videos. The Brydge Pro+ keyboard is similar in design to...

Apple's Work on New Upcoming Products Progressing Normally as Employees Adjust to Telecommuting

Monday March 30, 2020 11:58 am PDT by Juli Clover
Apple's development of upcoming products is progressing as usual despite the fact that Apple employees around the world are working from home, according to a new report today out from Bloomberg. Apple is still working on new versions of the HomePod, Apple TV, MacBook Pro, budget iPads, Apple Watch, iPhone, and iMac, all of which could be released "as early as later this year" and have been...

Apple Releases ProRes RAW Beta for Windows

Monday March 30, 2020 9:33 am PDT by Juli Clover
Apple today released ProRes RAW for Windows in a beta capacity (via Mark Gurman), with the software designed to allow ProRes RAW and ProRes RAW HQ video files to be watched in compatible applications on Windows machines. According to Apple, the software will let the files be played within several Adobe apps: Adobe After Effects (Beta) Adobe Media Encocder (Beta) Adobe Premiere...

2020 iPad Pro Teardown Provides Closer Look at LiDAR Scanner and Confirms Incremental Update

Saturday March 28, 2020 9:56 am PDT by Hartley Charlton
iFixit today shared a video teardown of the new iPad Pro, which Apple unveiled earlier this month. iFixit found that most of the internals of the 2020 iPad Pro are the same as the 2018 model, confirming that the device is a relatively incremental update. The most notable new feature seen inside the new iPad Pro was the LiDAR scanner, which measures the distance to surrounding objects up...

Apple Configurator 2 Updated With New Features, Including Support for Restoring Firmware on 2019 Mac Pro

Tuesday March 31, 2020 5:34 am PDT by Joe Rossignol
Apple Configurator 2 has been updated to version 2.12 with several improvements, including support for restoring firmware on the 2019 Mac Pro. The release notes:• Added support for restoring firmware on the 2019 Mac Pro • Allow access to websites using TLS 1.0 and 1.1 • VPN: Configure Provider Designated Requirement for Custom SSL connection type • VPN: Configure network options for ...

U.S. Government Using Mobile Ad Location Data to Track Compliance With Curbs on Movement

Monday March 30, 2020 4:48 am PDT by Tim Hardwick
The U.S. government is using smartphone location data from the mobile ad industry to track people's movements amid the coronavirus outbreak, according to a Wall Street Journal report. Local governments and the Centers for Disease Control and Prevention have received the anonymized data about people in areas of "geographic interest," with the aim being to create a portal of geolocation...