Tim Cook Testifies on Apple ‘Tax Evasion’: 5 Fast Facts You Need to Know

tim cook testimony

Apple CEO Timothy Cook testifies before the Senate Homeland Security and Governmental Affairs Committee’s Investigations Subcommittee about the company’s offshore profit shifting and tax avoidance in the Dirksen Senate Office Building on Capitol Hill today. A Congressional report released yesterday said that Apple, America’s most profitable technology company, used a complex system of international subsidiaries and tax avoidance efforts to shift at least $74 billion out of the reach of the Internal Revenue Service between 2009 and 2012. (Getty Images)

Apple CEO Tim Cook testified on Capitol Hill today, aggressively answering to allegations of Apple’s tax evasion.

Appearing before the Senate Subcommittee on Investigations, the Steve Jobs successor reminded lawmakers that Apple is America’s larget corporate taxpayer, flatly denied any wrongdoing, and showed no desire to alter Apple’s practices:

We pay all the taxes we owe — every single dollar. We don’t depend on tax gimmicks.

Cook even went on the offensive, critiquing the nation’s “outdated” tax code.

Here are five fast facts about his testimony and the situation.


1. Apple is Accused of Tax Evasion by Congress

Senator Carl Levin (D-MI), chairman of the Senate Investigations Subcommittee, Senator John McCain (R-AZ) speak to reporters during a briefing on Capitol Hill yesterday in advance of today's hearing on offshore profit shifting and the United States tax code.  (Getty Images)

Senator Carl Levin (D-MI), chairman of the Senate Investigations Subcommittee, Senator John McCain (R-AZ) speak to reporters during a briefing on Capitol Hill yesterday in advance of today’s hearing on offshore profit shifting and the United States tax code. (Getty Images)


On Monday, Politico reported that Senate investigators were accusing Apple of evading billions of dollars in taxes. The Senate probe alleges that the tech giant took advantage of numerous tax loopholes in the U.S. and funnelled close to $44 billion into offshore accounts. The investigation continued with details that Apple’s foreign subsidiaries, especially in Ireland, have no tax-resident status, which means they can take advantage of low tax rates.


2. Cook Said Apple is the Victim & the Tax System is Broken

 tim cook tax evasion testimony

Cook pauses during his opening remarks today. (Getty Images)


The bi-partisan panel questioning the CEO asked him about the abuses of the tax system the investigation found. Cook called the current tax system “outdated” and said the legendary firm is the one being abused. Cook’s testimony along with two other Apple execs continuously defended the company’s record and tax policy.

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3. Cook Gave McCain and Other Senators a Basic Lesson in Gadgets

Apple CEO Tim Cook Testifies At Senate Hearing On U.S. Tax Code

According to the Atlantic, the hearing turned in to an Apple 101 class. The two senators leading the panel, John McCain and Carl Levin, asked Cook a series of questions about Apple products, including why apps need updating. When the hearing took a break, the successor to Steve Jobs was barraged by other senators professing their love for the company’s creations. Apple’s innocence still remains to be seen, but maybe Tim Cook should consider tech advice for politicians as a side job.


4.This is Apple’s Second Recent Scandal

Apple head of tax operations Phillip Bullock, Apple CEO Tim Cook and Apple Senior Vice President and CFO Peter Oppenheimer. (Getty Images)

Apple head of tax operations Phillip Bullock, Apple CEO Tim Cook and Apple Senior Vice President and CFO Peter Oppenheimer. (Getty Images)


Last year, the computer giant struggled through another serious situation. Foxconn Technology Co LTD, a subsidiary that makes Apple products, was criticized for horrible working conditions after an explosion killed three workers. Foxconn’s working conditions were a huge pain for Cook and his colleagues.


5. Apple Should be Fine

Apple's Tim Cook Will Be Mauled By Congress: GallowayMay 21 (Bloomberg) — David Rosenbloom, Director at NYU Law's International Tax Policy, and Scott Galloway, Chairman and Founder of Firebrand Partners, discuss Apple's CEO, Tim Cook, testifying before congress. They speak on Bloomberg Television's "Bloomberg Surveillance." (Source: Bloomberg) — Subscribe to Bloomberg on YouTube: http://www.youtube.com/Bloomberg Bloomberg's "Surveillance" is a radio and TV business news show, featuring in-depth interviews with well-known business leaders, market analysts and leading economists. The show is hosted by Tom Keene, Sara Eisen and Scarlet Fu and includes frequent insight and analysis from economics editor Mike McKee. "Bloomberg Surveillance" covers market news, breaking news, finance, investment, global economics, business leaders and influencers, as well as the headlines and companies impacting the day ahead on Wall Street. In addition to covering Wall Street, the show includes global economics, currency market moves, earnings news, mergers & acquisitions, and insights on the world leaders and influencers shaping these events, including: Federal Reserve chairman Ben Bernanke, JPMorgan CEO and chairman Jamie Dimon, Apple CEO Tim Cook, Yahoo! CEO Marissa Mayer, Goldman Sachs CEO Lloyd Blankfein, Goldman COO Gary Cohn, economist Nouriel Roubini, investor Marc Faber, IMF chief Christine Lagarde, world bank president Jim Yong Kim, Meredith Whitney, former Wall Street executive Sallie Krawcheck and more. "Surveillance" broadcasts from Bloomberg TV's New York headquarters. The show airs on TV at 6-8amET/3-5am PT and on radio 6-10amET/3-7am PT. For a complete compilation of Surveillance videos, visit: http://www.bloomberg.com/video/bloomberg-surveillance/ Bloomberg Television offers extensive coverage and analysis of international business news and stories of global importance. It is available in more than 310 million households worldwide and reaches the most affluent and influential viewers in terms of household income, asset value and education levels. With production hubs in London, New York and Hong Kong, the network provides 24-hour continuous coverage of the people, companies and ideas that move the markets.2013-05-21T16:53:32.000Z
Apple is a leader in innovation and should be able to bounce back from this. Bloomberg Businessweek and other outlets felt the CEO handled himself well. Criticism was at a low, but the company still has opponents against its tax methods. Time will only tell if Apple under Tim Cook’s leadership will skyrocket past the legend its original creator left behind.