John Paczkowski

Recent Posts by John Paczkowski

Apple’s Cook to Face Senate Questions on Taxes, Offer Reforms

tim_cook7

Asa Mathat / AllThingsD.com

Apple CEO Tim Cook will testify Tuesday before the Senate Permanent Subcommittee on Investigation, which is examining U.S. companies’ offshore tax practices. This will be Cook’s first appearance at a congressional hearing since becoming CEO of Apple in 2011, and a potentially tough one during which he’ll be asked to field hard questions about Apple’s offshore cash holdings.

Not that Cook won’t have some good answers prepared. In the past, Apple has dispatched questions about its shifting of profits offshore by noting that it remains one of the largest taxpayers in the United States despite that practice; the company paid $6 billion in federal corporate income tax in fiscal 2012. Apple is currently sitting on about $145 billion in cash, only $45 billion of which is available in the United States, according to analysts. And that’s led plenty of critics to accuse it of dodging its U.S. liabilities.

This time, however, the company is taking a more proactive approach to the issue. It has armed Cook with some recommendations for tax reforms that might encourage companies like Apple to repatriate their offshore cash.

“If you look at it today, to repatriate cash to the U.S., you need to pay 35 percent of that cash,” Cook told the Washington Post in an interview ahead of the Tuesday hearing at which he’ll appear. “And that is a very high number. We are not proposing that it be zero. I know many of our peers believe that. But I don’t view that. But I think it has to be reasonable.”

Cook declined to offer further detail about Apple’s proposed reforms, but the Post characterized them as a “dramatic simplification” of corporate tax laws.

Asked for comment about Apple’s tax conduct, spokesman Steve Dowling deferred to Cook’s remarks speaking directly to that issue.

“I can tell you unequivocally Apple does not funnel its domestic profits overseas,” Cook told Politico. “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.”


Twitter’s Tanking

December 30, 2013 at 6:49 am PT

2013 Was a Good Year for Chromebooks

December 29, 2013 at 2:12 pm PT

BlackBerry Pulls Latest Twitter for BB10 Update

December 29, 2013 at 5:58 am PT

Apple CEO Tim Cook Made $4.25 Million This Year

December 28, 2013 at 12:05 pm PT

Latest Video

View all videos »

Search »

There’s a lot of attention and PR around Marissa, but their product lineup just kind of blows.

— Om Malik on Bloomberg TV, talking about Yahoo, the September issue of Vogue Magazine, and our overdependence on Google