Apple Boss Defends Company’s Tax Strategy

Tim Cook, Apple COO, in january 2009, after Ma...

Tim Cook, Apple COO, in january 2009, after Macworld Expo keynote. Picture by Valery Marchive (LeMagIT) (Photo credit: Wikipedia)

It is somewhat of a growing trend to see the tax strategies of major multinational companies, as well as wealthy individuals, being brought into question.  Such has been the focus on this issue, that it even led to the French Actor, Gérard Depardieu, giving up his French citizenship and later being given the opportunity of becoming a Russian citizen by Vladimir Putin.  In recent weeks, the focus has fallen onto tech giants, Apple.

Now Apple isn’t just a supplier of the latest must-have accessories to design grads, freelance writers and regular Starbucks frequenters – they are also the most valuable company in the world.  Nobody has accused Apple of partaking in any illegal tax evasion activities, but rather the have been finger-pointed for taking advantage of flaws in the US tax system.

Immoral Tax Activities

The accusation against Apple is that they have avoided paying over US$13 Billion, over the past two years, by implementing a complex scheme, involving their Irish subsidiaries.  Although this amount of money would not have a huge impact on the US budget deficit, it is felt that, as the most valuable company in the world, it is important to make an example of Apple, in illustrating that even the world’s largest companies can’t avoid paying the full amount of taxes.

It is not only Apple who have been investigated in the world of computing either, but also both Hewlett Packard and Microsoft.

Fair’s Fair?

Tim Cook, the CEO of Apple, has, however, stated that they do currently pay every single dollar of tax that they are accountable for and are indeed the United States’ largest corporate taxpayer.  He further went on to suggest that with current tax rates so high, they have no intention of bringing all of the money they make back to the US and said this was aligned to the responsibility they have towards shareholders in limiting tax expenditure.

Apple have been exploiting deviances in the tax laws of Ireland and the US, with regards to residency.  In the US, any company established there is deemed as being a tax resident, this is not, however, the case in Ireland.  Apple state that all they are doing is refusing to bring back profits made overseas to the US, in order to resist against the 35% tax charge – an approach they say is repeated in numerous multinational companies.

The Proposed Solution

The cries from the Republican side suggest that the tax rates on money made overseas should be relaxed, in order to encourage companies to bring those profits to the US.  They suggest that this too would convince companies to invest more in the US, rather than seeking more profitable pastures elsewhere.

There is also the suggestion that certain tax laws need to be reworded and loopholes removed, in order to avoid companies taking advantage of their flaws.  Fundamentally, Apple is currently facing only moral questioning, as opposed to legal accusations and, thus, until something is changed, there is nothing to suggest that they will be persuaded to shift their approach.

Featured images:

Trevor Norris is a freelance writer and finance blogger. He recommends searching for the best accountants in Manchester to solve any financial worries.

Apple Boss Defends Company's Tax Strategy by
Rating: 4.8/5. From 3 votes.
Please wait...