SEC clears Apple of tax wrongdoing

SEC clears Apple of tax wrongdoing

Apple's been at the center of controversy on Capitol Hill for not bringing more money into the United States, which some politicians have claimed is "tax avoidance." Not so, according to the U.S. Securities and Exchange Commission (SEC), which sent a letter to Apple clearing it of any wrongdoing, according to AllThingsD.

In a September letter to Apple, released late last week, the SEC said it had completed its review of the company’s fiscal 2012 annual report, and would take no action against it at this time. Evidently, there’s no need to, as the agency has found Apple’s disclosures to be sufficient, particularly now that it has agreed to provide investors with more information about its foreign cash, tax policies, and plans for reinvestment of foreign earnings.

American companies face stiff "repatriation" taxes when they bring money they earn overseas back into the United States. So Apple and countless other American companies that do business overseas find ways to avoid doing so. Apple, with its high profile and its stellar profits over the years, fell under lawmakers' scrutiny earlier this year, causing Tim Cook to go before a Congressional subcommittee to justify Apple's policies.

Cook told committee members that Apple paid all the taxes it owed. "Every single dollar," he said, adding that Apple complies with both the letter and the spirit of the law. Cook has, however, called for a reform of the tax code to make it easier for Apple and other companies with large amounts of cash overseas to bring it back home without paying stiff penalties.

Source: AllThingsD

Peter Cohen

Managing Editor of iMore, Mac and gaming specialist and all-around technologist. Follow him on Twitter @flargh

More Posts

 

12
loading...
0
loading...
36
loading...
0
loading...

← Previously

Deal of the Day: Belkin Grip Max Case for iPhone 5S and iPhone 5

Next up →

500px updated with edge to edge design, better gestures, and new features for iPad

Reader comments

SEC clears Apple of tax wrongdoing

6 Comments
Sort by Rating

Will any of the rest of the tech and other media that breathlessly proclaimed Apple a "tax cheat" report this news?? <sfx: crickets>

Doubtful -- because it is no different than what they reported earlier. If you go back to check, even the most strident Apple-is-cheating voices allowed what Apple (and others, but Apple most loudly) is strictly, speaking, legal. (See NY Times: http://www.nytimes.com/2013/05/24/business/making-companies-pay-taxes-th... ) Their problem was not that Apple violated any laws, but that SEC (and Irish) regulations specifically encourages them to act in this way. Senator McCain and the various reporting outlets viewed what Apple does as morally repugnant, and damaging to US government interests, but not illegal.

To recap, Apple Operations International (AOI) violated no laws, but that does not make it any less of a transparent shell constructed simply to avoid taxes. (Fortune, http://tech.fortune.cnn.com/2013/05/20/apple-cook-senate-taxes/ - and yes, Cook was correct when he testified that Apple employs 4000 people in Cork, but he deliberately avoiding mentioning that 3999 of them do not work for AOI.)

The SEC letter merely confirms what they reported earlier -- Apple violated no laws. That does not make their behavior any less shady. If you are an old time Dungeons and Dragons player, they have been 100% Lawful Evil -- obeying the letter of the law scrupulously while taking advantage of whatever unscrupulous behavior the law allows.

Just as you would expect any competent lawyer or accountant to do.

While I would love for Apple to bring back in more money made overseas, we have some of the highest repatriation laws in the world, no? How is that working for us? 35% of $0 is still $0. While, say, 20% of $100,000,000 is $20,000,000. Is it $35,000,000? no. But is a hell of a lot more than $0

Plus, as a business, a for profit business, their job is to do what ever they legally can to maximize profit.

You don't have to like it, but they have done what they are charged with.

You seem to have misread me - I am not disagreeing with you in the slightest.

Edit: actually one disagreement, in that you seem to imply Apple would bring home more cash if the repatriation rate were lowered from 35% to 20%, and that is nonsense. Currently, with AOI spearheading the perfectly legal double Irish technique, Apple pays effectively zero in *any* jurisdiction. It is either naive or disingenuous to asset Apple might be willing to repatriate a penny as long is there is any non-zero rate at all. (And yes, any corporation would do the same in their shoes.)

Yes, implying, but based on comments from Tim Cook. Granted, he said they would consider it at a lower rate, and even mentioned 20%. Granted, "considering it" and "doing it" are very different. So not naive, or disingenuous, just devil's advocate.

The laws should be amended so that none of these companies can avoid paying their taxes. I don't care about fanboy fights claiming "they aren't picking on other companies." I say "pick on" all of them like they pick on the American people. They need to end tax loopholes used by the rich, super rich and corporations.