Apple Inc. (NASDAQ:AAPL) CEO Tim Cook is going offensive regarding the company’s profits offshore, available cash and tax prior to his scheduled testimony in Congress. Cook talked to several reporters covering political issues in the country and provided a general idea about his talking points in a hearing next week.
"We don't have a large presence in Washington, as you probably know, but we care deeply about public policy and believe creative policy can be a huge catalyst for a better society and a stronger economy," said Cook.
In addition, Cook also rejected criticisms against Apple Inc. (NASDAQ:AAPL)'s business practices particularly the allegations that the company is sending its profits in the United States to its subsidiaries situated in countries with low tax rates.
According to him, “I can tell you unequivocally, Apple does not funnel its domestic profits overseas. 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. And so I'd like to be really clear on that.”
Apple Inc. (AAPL)'s Latest Filing:
Based on the latest filing of Apple Inc. (NASDAQ:AAPL) with the Securities and Exchange Commission (SEC), the company has $102.3 billion cash overseas as of March 30, and its available cash in the United States in around $45 billion.
The iPhone maker recently announced its plan to return $100 billion cash to shareholders over the next few years. The company needs to bring $26 billion from its overseas cash and pay $9 billion in taxes to fulfill its plan. The company opted to secure a $17 billion debt with $300 million interest to prevent paying $9 billion in taxes for bringing its $26 billion cash in the country.
Investors favored Apple Inc. (NASDAQ:AAPL)’s decision because it is more practical and beneficial for the company. Other corporations in the tech industry used the same strategy or loophole to avoid the high tax rate in the United States while taking advantage of current low interest rate.
Bruce Mehlman, a veteran lobbyist for the tech industry opined that the tax system needs an overhaul because it is broken and not competitive. He said that Apple Inc. (NASDAQ:AAPL) is paying more taxes than its competitors based in other countries particularly Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930).
"The policymakers made the code, and it's not nearly as flat, simple and logical as it should be, so companies across all sectors do what they can to minimize [their] tax burden and maximize research and product development. Tech is no different," said Mehlman.
Apple Inc. (AAPL) CEO on Economy
Cook also pointed out during the interview that Apple Inc. (NASDAQ:AAPL) is a great contributor the U.S. economy by creating jobs. He said, “Apple is contributing in a lot of different ways to the economy, and we're very, very proud of it, particularly in the job-creation area and the work we do to protect our environment.”
In addition, Cook said, "I hope to make some clear recommendations, and I trust there will be receptive parties there.”
Apple Inc. (NASDAQ:AAPL) spent $720,000 in lobbying in the first quarter this year to push its initiatives to reform the tax system and other issues relevant to the technology industry. Dean Garfield, CEO of Information Technology Industry Council said that Cook is interested in policy and issues going on in Washington as well as in other countries that would affect Apple’s ability to do business.
Apple Inc. (NASDAQ:AAPL) is one of the largest taxpayers in the United States. Last year, the iPhone maker paid $6 billion tax to the IRS, its estimated income tax for 2012 approximately $7 billion.