14 DAY TRIAL // Apple has released the opening statements of its CEO and CFO before the US Senate regarding several accusations that the company has been using legal loopholes to evade taxes.
Televised live, the hearing saw Tim Cook (Apple CEO) and Peter Oppenheimer (Apple CFO) elaborate on tax matters, including the fact that the company owns two entities outside US boundaries which operate under foreign legislature, and therefore incur different tax rates (compared to American tax rates).
Apple’s executives not only stressed before the committee that the company obeys U.S. tax laws, but also urged senators Carl Levin, John McCain, and Rand Paul to consider policy reform.
In plain English, Apple is somewhat forced to evade the United States’ 35% tax rate for the benefit of its shareholders, but would gladly bring back its cash hoard should that tax rate be reevaluated.
Apple’s CEO noted that the Cupertino giant is using its earnings growth “to invest billions of dollars in the U.S. to create even more American jobs.”
“We’re investing $100 million to build a Mac product line here in the U.S. The product will be assembled in Texas, include components made in Illinois and Florida, and rely on equipment produced in Kentucky and Michigan,” Tim Cook said, further enforcing his point regarding job creation in the US.
With reference to Apple’s subsidiaries, Chief Financial Officer Peter Oppenheimer said, “Our cost sharing agreement, which is common in the industry, is audited by the IRS, and we are in full compliance with all laws and regulations.
“The agreement enables Apple to share the costs and risks of developing new products with our Irish subsidiaries.”
“Virtually all this R&D – and the jobs that go with it – take place in the U.S. In exchange for this funding, the Irish subsidiaries have rights to distribute in Europe and Asia products created from the R&D funded by the agreement,” said Oppenheimer.
The two executives' opening statements are available in PDF format at the links below.