Apple, one of largest companies in the United States is also considered to be amongst the largest taxpayers in the country. It was revealed that Apple paid over $6 billion in taxes just last year. However, the company is now being accused by the Senate Permanent Subcommittee on Investigations of tax avoidance with the discovery of an offshore account.
In Apple’s defense, CEO Tim Cook gave testimony that the company is paying all the taxes it owes. He also added that it is the company’s intention to comply with the law. Cook also enunciated that his company is expected to pay more taxes this year, which they would gladly do. In one of his interviews, Cook stated that he was glad to appear in the Senate hearing in order to clear Apple’s name on the issue at hand.
Taxation strategies revealed
Apple was questioned about its tax payments when the Subcommittee on Investigations discovered that the company has a very multifarious web of offshore entities. According to the Senate, Apple has made use of Ireland as ground zero in making offshore companies that paid less tax than it should.
The chairman of the subcommittee, Senator Carl Levin, also stated that Apple was able to use the “Holy Grail” of tax avoidance by making a number of entities that holds large amounts of money while declaring to be not a paying tax entity of the country it is based on.
Apple didn’t break any law
Apple has however denied all the allegations and stated that it did not change the location of its intellectual property just to avoid paying taxes in the United States. The company also explained that it has considerable overseas cash due to the sales of its products outside the US.
According to subcommittee staffers, Apple didn’t actually break any law. The “grilling” was just a matter of clarifying certain matters and Apple gladly participated in the process.
Faulty taxation system
This inquiry into Apple’s tax strategy has lead Senator John McCain to believe that the United States has a very faulty taxation system. Apparently, tax strategies like the ones reportedly practiced by Apple are employed by HP and Microsoft as well. This only shows that much needed reforms should take place concerning proper implementation of tax laws. Apple considerably agrees with these reforms and is more than willing to cooperate with whatever tax laws are to be implemented.
A Wall Street hero
Apple took a huge hit when it was accused of avoiding taxes by the Subcommittee on Investigations. However, Apple’s CEO Tim Cook did not let anyone trample the good name of his company.
A lot of investors are now looking up to Apple’s CEO Tim Cook. Even though the company that brought innovative gadgets and made a huge difference in people’s lives was accused of avoiding taxes, many are actually in approval of how Cook acted as its CEO. According to a majority of investors in StockTwits, Cook’s actions have cemented the reasons why he was made CEO of Apple. They even commented that Cook appeared more commanding than the lawmakers questioning him.
Photo Credit: Tim Cook
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