Tim Cook says Apple won't repatriate money to US 'until there's a fair rate'
Apple sitting on at least US$200 billion that some investors have called on the company to re-invest
Apple CEO Tim Cook struck back at critics of the iPhone maker's strategy to avoid paying US taxes, telling The Washington Post in a wide ranging interview that the company would not bring that money back from abroad unless there was a "fair rate."
Along with other multinational companies, the tech giant has been subject to criticism over a tax strategy that allows them to shelter profits made abroad from US taxation.
The move complies with the letter of the law, if not the spirit, as a few particularly strident critics have lambasted Apple as a tax dodger. The nonprofit Citizens for Tax Justice estimates that big companies have parked more than US$2 trillion offshore, which is subject to more favorable tax rates.
However, in response to a question from The Post, Cook acknowledged that Apple was effectively taking advantage of a massive tax loophole, which he said was perfectly legal." "The tax law right now says we can keep that [profit] in Ireland or we can bring it back."
It's not as if the tech giant is exactly hurting for cash. Apple is sitting on at least US$200 billion in cash on hand, a pile of money that some investors have called on the company to re-invest.
Cook added that "when we bring it back, we will pay 35 per cent federal tax and then a weighted average across the states that we're in, which is about five per cent, so think of it as 40 per cent. We've said at 40 per cent, we're not going to bring it back until there's a fair rate. There's no debate about it."
The US corporate tax rate has been a subject of vigorous debate. Critics say the code rife with distortions that critics say discourages companies from repatriating capital, and lead to strategies like "inversions" that encourage firms to merge with foreign companies, and move operations abroad to avoid higher taxation.
While some proponents of the higher US tax rate say it's unpatriotic for companies to practice inversions or shelter income, Cook hit back at the suggestion.
"It is the current tax law. It's not a matter of being patriotic or not patriotic. It doesn't go that the more you pay, the more patriotic you are."