A few months after Tim Cook went to Washington to defend Apple’s tax saving tactics, the Securities and Exchange Commission (SEC) has cleared the company of any tax related wrongdoings.
Four months after opening its review of Apple’s finances, the Securities and Exchange Commission has closed it, having found nothing untoward about the company’s handling of its overseas cash and related tax policies.
In a September letter to Apple, released late last week, the SEC said it had completed its review of the company’s fiscal 2012 annual report, and would take no action against it at this time. Evidently, there’s no need to, as the agency has found Apple’s disclosures to be sufficient, particularly now that it has agreed to provide investors with more information about its foreign cash, tax policies and plans for reinvestment of foreign earnings. In the SEC’s eyes, Apple accounts for taxes in accordance with generally accepted accounting principles.
In May, Tim Cook had testified in front of the U.S. Senate Permanent Subcommittee, defending the company’s tax saving tactics by saying that Apple pays every single tax dollar it owes, and that it complies not just with the tax laws, but even with the spirit of the laws. He suggested a dramatic simplification of the corporate tax code including lower tax rates and a “reasonable tax on foreign earnings” so that it can bring back its overseas cash to the US.
Last year, The New York Times published a lengthy article detailing Apple’s strategy to save billions of dollars in taxes by routing profits through Irish subsidiaries, who have to pay a very low tax rate. You can read more on the topic by following this link.