After spending the summer in the hot seat over its tax strategy, Apple has received the all-clear sign from federal regulators. In a September letter, Securities and Exchange Commission investigators who’d been looking into Apple’s finances gave the iPhone maker some good news, saying the agency plans to take no action at this time.
In May, Apple CEO Tim Cook testified before the Senate Permanent Subcommittee on Investigations, telling members his company pays all taxes it owes. Like the subcommittee, the SEC apparently found no wrongdoing on Apple’s part…
AllThingsD reports:
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.
The SEC also asked for additional information for investors such as the names and tax rates of the countries where Apple keeps its foreign cash. The Wall Street Journal reports that Apple complied with the request, including “a more tailored discussion” of risks associated with Apple’s tax structure.
There you have it.
It is now clear that Apple did not create “the Holy Grail of tax avoidance” over cash held overseas after all, as the Senate Permanent Subcommittee on Investigations hearing into Apple’s tax practices asserted earlier this year.
The SEC decision to go no further in investigating Apple’s tax procedures is an apparent vindication for Cook, who earlier told senators Apple “not only complies with the laws, but we comply with the spirit of the laws.”
The company insisted it does not “depend on tax gimmicks.”
Apple’s tax problems happened as it announced a stock buyback in an attempt to calm investor concerns over the company’s future growth.
A New York Times report also detailed how the tech giant funneled its European profits through low-tax countries, such as Ireland, igniting a round of finger-pointing among EU members.
Only last week, a report suggested Apple’s cash horde represented ten percent of all U.S. corporate cash.