As you probably know by now, Apple Inc. (NASDAQ:AAPL) is being investigated by the U.S. Senate Permanent Subcommittee for its past tax practices. More specifically, the Cupertino based company is being asked to explain its offshore tax practices.
While CEO Tim Cook and CFO Peter Oppenheimer have said in the past, Apple is not doing anything illegal as far as its tax situation is concerned. However, they need to show more proof than that.
Cook has been quoted as saying the following regarding Apple Inc. (NASDAQ:AAPL)’s tax practices:
“We pay all of the taxes we owe — every single dollar. We not only comply with the laws, but we comply with the spirit of the laws.”
Easy enough, right? Well, not exactly. It appears that Apple has set up “ghost corporations” in Ireland as a means of avoiding corporate taxes in the United States. While this may be looked down upon, Cook has made note that these corporations are being used to fund research and development initiatives.
If you are interested in learning more about where Apple Inc. (NASDAQ:AAPL) stands on this, we don’t have to look any further than its official website.
The company has posted opening statements by both Tim Cook and Peter Oppenheimer. If you have yet to read these in their entirety, you are missing out on plenty of useful information.
Here is just a little bit of what Apple Inc. (NASDAQ:AAPL) CEO Tim Cook had to say:
“With all this growth and investment, Apple has become – to the best of our knowledge – the largest corporate income taxpayer in the United States. Last year, our U.S. federal cash effective tax rate was about 30.5%, and we paid the U.S. Treasury nearly $6 billion in cash. That’s more than $16 million per day. We expect to pay even more income tax this year.”
After that, Cook goes on, in simple terms, to explain “how we view our responsibility with respect to taxes.”
A company as big as Apple Inc. (NASDAQ:AAPL) is sure to face tax trouble from time to time, even if the details laid out are not 100 percent true. The spotlight is too bright and the revenue is too big for Cupertino to go unnoticed.
Do you agree with what Cook had to say? What are your thoughts on Apple Inc. (NASDAQ:AAPL) ‘s tax practices, and is there anything it can change in the future to avoid similar issues?