Like many of the world’s mega corporations, Apple is guilty of doing some tax… avoidance. Not tax evasion, that would be illegal, but tax avoidance; everyone does it. Amazon and Google have been dragged across the public coals for their schemes that help them pay very little, despite their billions in earnings and Apple does the same. Defending that practice in short order, is Tim Cook, current CEO at Apple.
He’ll explain why his company reports a 25.2 per cent tax rate, but only pays 15 per cent to the US government and why it then sets aside money in-case it gets in trouble for any tax liabilities. Cook has said in the past, that Apple doesn’t deliberately funnel cash overseas, but it does have money in foreign holdings and it does keep it from entering the US – where it would be taxable at a higher rate.
As the Telegraph reports, Cook is expected to argue that the current US tax system is obtuse and should be simplified. Speaking about the meeting, he said: ““If you look at it today, to repatriate cash to the US, you need to pay 35pc of that cash. 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 think it has to be reasonable.”
In the past, many of the big foreign purchases by companies have been thought at least partially due to the current tax system, which would see them not being taxed on overseas investments.
KitGuru Says: The tax system is a bit of a mess. It’s not hard to see both sides of the argument. Yes the big corporations should pay the tax that they owe, but they’d surely be more willing to pay it if the rates weren’t so high.