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Apple faces questions on US taxes, report says

Will Willitts (via AFR) | May 20, 2013
Apple would have paid a tax rate of about 15 per cent last year, far below the 25.2 per cent that it reported, had it not used a form of reserve accounting/

Apple would have paid a tax rate of about 15 per cent last year, far below the 25.2 per cent that it reported, had it not used a form of reserve accounting, the Financial Times reported.

The rare accounting treatment, that sets the iPhone maker apart from other big US tech companies, "has helped to distract attention from Apple" as other companies such as Google have come "under public attack", the newspaper reported on its web site.

Still, Apple chief executive Tim Cook will likely be grilled on the company's tax payments when he appears before the US Senate's permanent investigations subcommittee on Tuesday in Washington. The committee has already questioned executives from Microsoft and Hewlett-Packard, asking about the techniques that US companies use "to shift profits to lower-tax countries", the report said.

Last week, Mr Cook said Apple paid all the US taxes it was liable for and "does not funnel its domestic profits overseas", the FT said.

"The 25.2 per cent tax rate Apple shows in its accounts is boosted by billions of dollars it sets aside each year to cover future tax liabilities, which would fall due if it repatriated part of its $US102.3bn of overseas cash holdings," the report added.

 

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