Apple’s Tim Cook calls overseas tax rap ‘political crap’

23 Dec 2015 | Author: | No comments yet »

Apple CEO Cook Slams Tax Policy on ’60 Minutes’; Street Reviews Management Shuffle.

The tech giant has been subject to European Union tax probes on low-tax arrangements — or “sweetheart deals” as they’re known — in Europe, and has continued to invest in creating jobs in Ireland.Cook’s remarks, made on CBS’s 60 Minutes, come amid a debate in the U.S. over corporations avoiding taxes through techniques such as so-called inversion deals, where a company re-domiciles its tax base to another country.Tim Cook doesn’t often lose his cool, but he got surprisingly riled up while discussing claims that Apple is doing its best to avoid paying taxes on overseas earnings during an interview with 60 Minutes’ Charlie Rose. “That is total political crap,” Cook says. “There’s no truth behind it.Coming up this weekend on “60 Minutes,” (AAPL) talks with on a number of topics, including repatriation of overseas profits and the issue of taxes.

The company holds $181.1 billion in offshore profits, more than any other U.S. company, and would owe an estimated $59.2 billion in taxes if it tried to bring the money back to the U.S., a recent study based on SEC filings showed. Cook responds the company would have to pay 40% of it to the government in taxes, and that the tax policy of the U.S. “is one designed for the industrial age,” not the modern world. Nomura Equity Research’s Jeffrey Kvaal reiterates a Buy rating on the shares, and a $145 price target, writing that Williams “has functioned in this role for some time – he and Mr.

Cook have risen through the Apple ranks together” and so this is “another sign this is a codification of existing roles.” Is Williams in line to be the next CEO? “Perhaps…but only the board knows,” writes Kvaal. “We do not believe this signals Mr. It’s past time to get it done.” When speaking at the 2013 Senate hearing, Cook said that the US tax rate from transferring overseas earnings “would need to be a single-digit number” before Apple brought its money back. The debate has quieted down in the time since, and Ireland — where one of its major holding companies was based — is beginning to close a major tax loophole that companies used to minimize payments. Apple’s polished public persona tends to make its media appearances tame and constructed, but this clip suggests that Rose may get some unexpected moments out of them.

The appointment of Johny Srouji as head of hardware “results from his success in silicon efforts, perhaps reflecting further vertical integration intentions as well as the Apple’s predilection for unusual spellings of ‘Johnny,’” quips Milunovich. Apple has an interesting dichotomy: its products are increasingly closed and integrated while at the same time driven by platform economics, which require Apple to be more open.

However, we think Apple mostly subsidizes on the software/services side of the platform to monetize through the iPhone, which limits the profitability of services.

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