Apple has published the opening statements read by CEO Tim Cook and CFO Peter Oppenheimer earlier today at the U.S. Senate Subcommittee hearing on corporate taxes. The hearing lasted several hours and was televised live on CSPAN.
U.S. Senator Rob Portman from Ohio has just raised a fascinating point at today’s Senate Sub-Committee Hearing to Examine Offshore Profit Shifting and Tax Avoidance by Apple Inc.
The American corporate tax system is so broken that Apple is at a competitive disadvantage against Samsung when it comes to the taxes it pays globally, and how easily it moves its money around.
Senator Claire McCaskill has just asked Apple CEO Tim Cook about the deal Apple forged with Ireland to pay only 2% taxes, and whether or not there will ever be a country that offers Apple such a great tax deal that they would pack up and move out of Cupertino to overseas.
John McCain ended his grilling of Apple CEO Tim Cook at today’s Senate Sub-Committee Hearing to Examine Offshore Profit Shifting and Tax Avoidance by Apple Inc. with a nice little joke.
“Sir, there’s only one thing I wanted to ask you today: why do I keep on having to update all the apps on my iPhone? Can’t you guys fix that already?”
“Sir,” Tim cook laughed. “We’re working on making our products better all the time.”
“Do you feel that you’ve been bullied or harassed by this committee?” Senator John McCain has just asked Tim Cook at the Senate Sub-Committee Hearing to Examine Offshore Profit Shifting and Tax Avoidance by Apple Inc.
“I feel good to be participating in this. I hope to help the process. I’d like comprehensive tax reform to be passed this year, and we will help in anyway we can.”
“I wasn’t dragged here, sir,” Tim Cook laughed.
“You’ve obviously taken advantage legally of a number of loopholes. Couldn’t you draw a conclusion that you have an unfair advantage over domestic companies?” asked McCain.
“No, it’s not the way I see it. Apple pays 30.5% of its profits in taxes on the United States. I would guess that’s high on the list of how it stacks up against other companies. We do have a low tax rate outside the U.S., but it’s for products we sell there, not within. So the way I look at this is there’s no shifting going on.”
Tim Cook is saying that because domestic companies operate only domestically, Apple has no advantage over them domestically: it only has an international advantage, which isn’t applicable in talking about “competitive advantage” in a U.S.-only context.
Apple CEO Tim Cook and CFO Peter Oppenheimer are in Washington D.C. this morning to talk to a Senate subcommittee about Apple’s off-shore cash hoard. The Apple execs are expected to face a lot of heat surrounding Apple’s Irish subsidiary, through which Apple has funneled 64% of its earnings without paying any tax, yet has zero employees.
Before the hearing got underway though, Ireland’s deputy prime minister, Eamon Gilmore, issued a public statement which claimed Ireland isn’t to blame for Apple’s low tax bill, even though the country has become a tax haven for multinationals since the 1960s.
Apple CEO Tim Cook has just started his testimony in front of the Senate Sub-Committee Hearing to Examine Offshore Profit Shifting and Tax Avoidance by Apple Inc. in Washington, D.C.
“I am proud to represent Apple here. With Apple’s international revenues twice as large as domestic revenues, we are often asked ‘Does Apple still consider itself an American company? To that, I answer an emphatic yes. We are proud to be an American company.”
Apple CEO Tim Cook is scheduled to appear before a Senate committee tomorrow morning to talk about Apple’s off-shore cash that’s now worth over $100 billion. Last week, Cook stated that his company believes the entire U.S. corporate tax system needs to be overhauled to encourage companies like Apple to bring earnings from overseas back to the U.S.
This afternoon Apple published its testimony before the Permanent Subcommittee on Investigations, that contained a wish-list for the type of comprehensive corporate tax reform it thinks would be best for the U.S. tax system. Following the company’s ethos to believe in the simple, not the complex, Apple’s tax-wish list would dramatically simplify the U.S. corporate tax system.
In its testimony, Apple states that the comprehensive reform should have the following traits:
“Intel Inside.” It’s been called one of the best campaigns to ever come out of Silicon Valley’s Mad Men, and it turned a relatively unknown maker of microprocessors into a $100 billion dollar company, and a household name. All this, thanks to a blue sticker slapped on every Intel PC or laptop.
Every Intel PC or laptop except Apple’s, that is. Even when Cupertino transitioned to Intel processors in 2006, Apple refused to put ‘Intel Inside’ stickers on their new Macs and MacBooks. And with characteristic bluntness, Steve Jobs had no problem explaining why when asked about it back in August 2007, right after the first aluminum iMac was introduced.
