You can’t help but laugh at Stewart’s ribbing of the senators’ questioning, but it is pretty clear Apple is pushing for simplicity and is only jumping through the loopholes because they are there. Tim Cook appears very genuine in his hopes for a more simple, fair tax code.
During this morning’s Senate hearing regarding Apple’s tax strategies, Apple CEO Tim Cook provided opening statements regarding Apple’s perspective on the issues. Notably, during a time in which Cook was discussing Apple’s United States-based operations and strategies, the Apple CEO said that Apple’s upcoming Made-in-the-USA Mac line will be assembled in Texas…
According to the congressional report, Ireland had also agreed a special 2 percent rate for Apple’s Irish taxable profits instead of the normal 12.5 percent, but a spokesman for Ireland’s finance department, when asked how and why this had come about, said: “Ireland’s tax system is statute based, so there is no possibility of individual special tax rate deals for companies.”
This appears to flatly contradict a statement by the Senate subcommittee that accused Apple of … Read more
In the testimony, Apple proposed what it called comprehensive corporate tax reform that should: Be revenue neutral, eliminate all corporate tax expenditures, lower corporate income tax rates; and implement a reasonable tax on foreign earnings that allows free movement of capital back to the US.
While some Subcommittee members may have differing views on these tax policy matters, Apple hopes the Subcommittee will see that these recommendations aim to create meaningful change and go well beyond what most US companies propose. As both a pioneer and participant in the American innovation economy, Apple looks forward to working with the Subcommittee on its efforts to encourage comprehensive reform of the US corporate tax system. Apple appreciates the opportunity to appear before the Subcommittee to contribute constructively to this important debate.
Apple also detailed the company’s current tax practices and noted it “made income tax payments to the US Treasury totaling nearly $6 billion – or $16 million per day.” Apple points out that, at a rate of 30.5%, that accounts for around “$1 out of every $40 of corporate income taxes collected by the US Treasury last year.”
Apple continued by commenting on its recent decision to borrow $17 billion in debt instead of repatriating offshore funds to help fund its shareholder return: Read more
Tim Cook and Apple tend to avoid any public discussion aside from comments during quarterly earnings calls, but it seems the company is on a PR offense leading up to next week’s public hearings.
“We don’t have a large presence in Washington, as you probably know, but we care deeply about public policy and believe creative policy can be a huge catalyst for a better society and a stronger economy.”
Cook went on to defend Apple against any accusations that may come its way next week.
“I can tell you unequivocally Apple does not funnel its domestic profits overseas. We don’t do that. We pay taxes on all the products we sell in the U.S., and we pay every dollar that we owe. And so I’d like to be really clear on that.”
The Apple CEO also noted the company’s $100 million project to produce a Mac line in the United States this year, which the company says will add jobs to the economy. Read more
Yesterday we decided not to run with a story published by Bloomberg that Pegatron’s forecasted 25 percent to 30 percent drop for second-quarter revenue was due to “falling iPad mini demand.” It seemed a little far fetched that an Apple supplier would be giving up specific information on product demand, something we know suppliers in Apple’s circle typically remain tight-lipped on. Today CEO of Pegatron Jason Cheng has confirmed our suspicions in an email to Fortune claiming that Bloomberg reporter Tim Culpan made the iPad mini angle up.
While quoting an analyst’s expectations for iPad mini demand in Q2, Bloomberg’s Tim Culpan offered the following quote from Pegatron Chief Executive Officer Jason Cheng as proof:
A decline in revenue from the iPad Mini “is more on demand, while price has been stable. Not just tablets, also e-books and games consoles, almost every item is moving in a negative direction.”
Pegatron chief Jason Cheng says he wasn’t referring to iPad mini specifically, but rather all of its products including all tablets and game consoles, while noting that “clearly refused” to answer Culpan’s questions related to specific products. Here’s what he had to say about the Bloomberg piece: Read more