Tim Cook calls notion of Apple avoiding US taxes ‘political crap’
Apple CEO says the company pays ‘every tax dollar we owe’ amid debate in the US over corporations avoiding tax by using offshore units
Apple’s chief executive Tim Cook has dismissed as “total political crap” the notion that the technology giant was avoiding taxes.
Cook’s remarks, made on CBS’ 60 Minutes show, come amid a debate in the United States over corporations avoiding taxes through techniques such as so-called inversion deals, where a company re-domiciles its tax base to another country.
Apple saves billions of dollars in taxes through subsidiaries in Ireland, where it declares much of its overseas profit.
“Apple pays every tax dollar we owe,” Cook told 60 Minutes’ Charlie Rose, according to excerpts from the interview released on Friday. Cook said bringing profits back to the United States would cost him 40%. “I don’t think that’s a reasonable thing to do,” he said.
The Senate Permanent Subcommittee on Investigations investigated Apple’s tax strategies and found that in 2012 alone the company avoided paying $9 billion in US taxes, using a strategy involving three offshore units with no discernible tax home, or “residence”.
The press office of the subcommittee did not immediately return a request for comment on Cook’s remarks.
Apple holds $181.1bn in offshore profits, more than any other US company, and would owe an estimated $59.2bn in taxes if it tried to bring the money back to the United States, a recent study based on SEC filings showed.
The current tax code was made for the industrial age, and not the “digital age,” Cook said. “It’s backwards. It’s awful for America. It should have been fixed many years ago.“
Rebecca Lester, assistant professor of accounting at the Stanford Graduate School of Business, thought Cook’s colorful language might reflect frustration about the lack of movement on tax reform in Washington.
“Companies and the government are in a game of chicken, waiting to see which one moves first,” she said. But so far, corporations are unwilling to bring overseas money back because of the tax implications and want Washington to act.
“It sounds like Tim Cook is getting even more frustrated,” Lester said.
Apple shares closed down 2.7% on Friday at $106.03.
