SEC Clears Apple’s Tax Disclosures
Four months after opening its review of Apple’s finances, the Securities and Exchange Commission has closed it, having found nothing untoward about the company’s handling of its overseas cash and related tax policies.
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. In the SEC’s eyes, Apple accounts for taxes in accordance with generally accepted accounting principles.
The review’s conclusion follows a summer of tax scrutiny for Apple, kicked off by the Senate Permanent Subcommittee on Investigations claim that the company used the “Holy Grail of tax avoidance” to pay little or no corporate taxes on some $74 billion in profits over the past four years. Apple, of course, disputed that characterization, sending CEO Tim Cook to Washington to tell the subcommittee to its face that the company is a good corporate citizen.
Good news for Apple, which can now presumably go about its business without further bother from the SEC and the Permanent Subcommittee on Investigations, whose probe found no evidence that the company did anything but comply with tax law. Unless, of course, those agencies and the broader government decide to consider Apple’s proposal for tax reforms that might encourage companies to repatriate their offshore cash.
Below, a video from D11, in which Cook discusses Apple’s tax strategies and its call for a major overhaul of corporate tax code:
Correction: This post was updated to make it clear that the SEC’s review concerned Apple’s tax disclosures, not the legality of its tax practices under U.S. tax law, which is the purview of the IRS.