updated 05:10 pm EDT, Thu May 16, 2013
'Apple does not funnel its domestic profits overseas'
Ahead of the Apple CEO's US Senate testimony, Tim Cook has replied to questions about politics and Apple's offshore tax practices in a new Politico interview. "We don't have a large presence in Washington, as you probably know, but we care deeply about public policy and believe creative policy can be a huge catalyst for a better society and a stronger economy," he says.
"I can tell you unequivocally Apple does not funnel its domestic profits overseas.We don't do that.We pay taxes on all the products we sell in the US, and we pay every dollar that we owe. And so I'd like to be really clear on that," he adds regarding potential Senate criticism of Apple's offshore cash. About his upcoming testimony, he says he hopes to "make some clear recommendations," and that he trusts there will be "receptive parties there."
Apple has about $100 billion offshore, which it has refused to repatriate unless it can pay less than the standard 35 percent tax rate, arguing that they have been taxed locally on those sales once already. To that end, Apple and other similarly-minded businesses have pressured US politicians for a temporary "tax holiday." To avoid paying taxes, Apple has even gone to the extent of putting up a $17 billion bond sale to fund a cash return program for shareholders.
In the interview, Cook also repeats other talking points, such as a $100 million plan to bring some Mac production back to the US, and a claim that Apple is one of the biggest taxpayers in the US. Cook says the company owes about $6 billion for 2012, and expects to pay another $7 billion by the end of its 2013 fiscal year. As for Mac production, he comments that parts will come from Arizona, Florida, Illinois, Kentucky, and Texas, and go into an existing Mac model, rather than a new brand.