Apple chief executive officer Tim Cook took the hot seat on Tuesday morning in Washington to answer questions about a tax planning strategy that has enabled it to avoid billions of dollars of taxes.
Carl Levin, chairman of the Senate investigations committee, set the tone with his opening remarks, noting that just in 2012, Apple had exploited tax loopholes allowing it to avoid $9bn in US taxes. Such practices, he said, did “real harm” to the US economy, disadvantaging domestic companies that don’t make use of “tax gimmicks”.
You can watch the hearing here, read Mr Cook’s written testimony here and read the Senate committee’s report on Apple’s tax structure here.
The FT’s latest ebook is about Amazon and its voracious expansion from online book retailer into technological giant.
Is the company a force for good? Can it justify its current stock price? Why does Amazon compete with the companies it provides services to? Will Amazon agree to pay more tax in the UK as Starbucks just agreed to do?
Thanks to everyone who took part in the Q&A. If you have further questions, please post them to Twitter using #FTAmazon. Barney Jopson, the FT’s US retail correspondent, and Andrew Edgecliffe-Johnson, global media editor, will answer them here as soon as possible. Read more
The answer, based on our back-of-the-envelope calculations: Probably, yes.
But that doesn’t mean that some of the juicy tax benefits the sector has enjoyed aren’t about to come in for some close scrutiny. A case in point: the near-$500m tax benefit Apple got last year for keeping cash parked offshore rather than returning it to the US.
The question in the headline above arises because the White House, trawling for ways to plug corporate tax loopholes and fill a yawning fiscal deficit, has just come up with ways to trim back on the tax privileges of US companies that operate internationally. Read more