Tim Cook calls notion of Apple avoiding US taxes ‘political crap’

23 Dec 2015 | Author: | No comments yet »

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

Cook’s remarks, made on CBS’ 60 Minutes show, come amid a debate in the United States over corporations avoiding taxes through techniques such as so-called inversion deals, where a company redomiciles its tax base to another country. “Apple pays every tax dollar we owe,” Cook told 60 Minutes’ Charlie Rose, according to excerpts from the interview released on Friday. 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.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.

Cook was questioned on this matter two years ago in front of Congress, and he repeats a lot of the points that he made back then: namely, that he thinks it costs too much to bring money back to the US. “It would cost me 40 percent to bring it home, and I don’t think that’s a reasonable thing to do,” Cook says. “This is a tax code, Charlie, that was made for the industrial age, not the digital age. 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. 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. Rebecca Lester, assistant professor of accounting at the Stanford Graduate School of Business, thought Cook’s colorful language might reflect frustration about the lack of movement on tax reform in Washington. “Companies and the government are in a game of chicken, waiting to see which one moves first,” she said. Senators had questioned whether these were “functionally managed and controlled in the US,” and, if so, whether Apple ought to be paying US taxes on them.

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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