Apple to tell Senate it pays every cent of its taxes
Tim Cook’s taking on the tax man. On Tuesday, the Apple CEO will appear before the U.S. Senate’s permanent Subcommittee on Investigations to discuss that body’s look into multinational companies and how they pay taxes. As a special preview to those who really can’t wait to hang on Cook’s every word, Apple on Monday released its head honcho’s testimony.
Those searching for even the merest hint of Apple’s future plans will want to find another tree up which to bark: the 18-page testimony deals almost exclusively the relatively dry subjects of Apple subsidiaries, the company’s corporate structure, and its broad suggestions for overhauling the federal tax system. Given that, it’s no surprise that Cook will be joined by Peter Oppenheimer, the company’s CFO, and Phillip Bullock, Apple’s head of tax operations.
Apple acknowledges that a corporate tax overhaul may may mean that it pays more, but says that it prefers an “overall improvement in efficiency, flexibility and competitiveness.”
In its testimony, Apple begins by stressing that as one of the largest companies in the U.S., it provides a huge benefit to the economy. Included in the numbers the company tosses around are estimates of how many jobs it supports or has created in the U.S. (approximately 600,000, including 50,000 of its own employees and around 290,000 related to the company’s so-called “App Economy”), the large sums it’s paid out to app developers (more than $9 billion), and the company’s fiscal year 2012 tax bill (almost $6 billion, which it estimates will rise to more than $7 billion for fiscal year 2013). The last, Apple says, likely makes it the largest corporate income tax payer in the U.S.
Apple strenuously asserts that it pays every cent it owes, both to the U.S. government and to the governments of other countries in which it does business. The most significant of those is Ireland, in which Apple has five—count ‘em, five—subsidiaries, each of which the company says adhere to the letter and spirit of the law; Apple says it doesn’t use tax gimmicks, such as offshore accounts in the Cayman Islands or Caribbean nations, and its large foreign holdings are simply due to the fact that the majority of its revenue—61 percent last year—are generated internationally.
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