Apple CEO Tim Cook Testifies About Avoiding Taxes- Part 1 of Hearing

A Senate subcommittee questions Apple CEO Tim Cook about how Apple has apparently legally avoided paying billions of dollars in taxes to the US government by setting up companies in other countries. Part 2 is here: • Part 2-Apple CEO Tim C...

[@SHGames97]

Haha at first he was just repeating his keynote routines!!!!!!!!!!!!!!!!!!

[@diggerpete9334]

His sounds like he is going through his new product release routine.

[@watchthisout9687]

..TRY TO SELL THIS NOW ONE FOR CARL LEVIN CARL LEVIN IS A ONE WHO IS USED TO THIS KIND OF STUFF IT IS NO DIFFERENCE THAN THE ONE SHITTY DEAL OF GOLDMAN SACKS IN THE FINANCIAL CRISIS HEARINGS hahaha..

[@JackQuark]

Running a company is really trouble. I'm surprised that Cook still has so much hair after all the exhausting work.

[@JackQuark]

Capeau Good point.

[@DanteEspinoza]

Apple is a genius company and deserves everything that they earn. They honestly do change lives of the people all over the world not to mention they really do provide many jobs in many different ways all over America. I applaud you Tim Cook you're a great businessman and I'm glad someone like you is running a innovative company in Steve Jobs place.

[@terrythompson7535]

Perhaps you are correct that Apple does good work, but if they are going to receive The Federal Reserve's quantitative easing money, which is created out of thin air, and tax payers are expected to pay that money back, then shouldn't they be paying taxes? Also, why are we paying our taxes to the shareholders of stock of privately owned central banks for creating money out of thin air to loan to government and corporations anyway?

[@M.-.D]

I am a genius who changes lives, why do I have to be transparent to the government and pay all legally obligated taxes?

[@Durrpadil]

The only reverberating word that comes to my mind.... BUSTED.

[@ayouthwellspent]

This is one of the best adverts I've seen.

[@bigdaddybulge4206]

Tim Cook always sounds like he's on the stage at WWDC or something

[@ofnotandi]

It is very hard for smaller companies to compete with Apple when Apple pays 0.05% in taxes.

[@WDEMMEL]

Based on EU law, a company has the option to pick any country in the EU to be taxed for its profits. Apple, in contrast to Starbucks chooses to not optimize EU income tax by pooling their operational profits in the lowest tax country, but pay the taxes due in every country they do business in. They buy their products from the US, for which Apple Inc pays taxes on their revenue. All these transactions must under US tax law be eliminated (inter-company elimination) before the roll-up of all entities worldwide goes into the calculation of Apple Incs profit and is than be taxed. 30.5% effective tax rate ought to be the highest tax any large corporation pays in the US. Verizon and GE pay zero. Coming to think of it, including subsidies, GE is on welfare. The Ireland Subsidiary is a cash management tool, which does not effect taxable income other than the interest, which is part of the rolled up of world wide income. Apple management and the advisers of congress have done a piss poor job comprehending the difference of accounting for tax purpose, including the tax rules for consolidated corporate profits, and flow of cash for management purpose. If the roll-up of world wide business activity could not sustain an IRS audit, they would have had a field day. But they didn't, did they? I wouldn't consider myself a particular fan of Apple products or large corporations, but this was an inquisition by congress. What I am a fan of is justice, and their was nor justic, nor honor in congress' action. "We are successful because we keep things simple. I want to appeal to make the tax code simple." ~ Tim Cook - CEO Apple, Inc. "We can't bring funds back to America, because of limitations created by taxation." ~ Tim Cook - CEO Apple, Inc Small business cannot succeed because of over regulation, and large companies cannot freely optimize their businesses. Some of the deferred profit regulations literally force irrational actions. Congress at one point or another made laws to abandon conservative accounting principals, like "cash based" and "lowest cost principal", that doesn't allow for "massaging the numbers" and replaced it with rubber band regulations like "deferred revenue", "reserves", "stock valuation" and the like. Somebody should tell congress :"You cannot have the cake and eat it". There is very little evidence for the existence of intelligence in Washington. Or is it a matter of morals?

[@mcswaggerridebmx]

45 fucking percent? really? even if they were evading tax revenue, I wouldn't blame them at that rate. why is it so high? out of 200 billion they'd have to pay 90 billion just to bring that money home.

[@angelolife]

they said 30, 5% several times. which is very much less if they payed more than 0.0005% tax in ireland for the incomes of all their sales in europe, africa and asia. that would maybe not matter much for small companies in america, who have to pay tax for all their incomes, but it's sure as hell unfair against all phone, computer and app-companies outside of america, since they won't be able to compete fairly against a world dominating company who gets huge tax breaks. would they have to fire a few people to be able to pay their full tax and still give the shareholders and ceos their huge wages and shares? Yes. Could they choose to not pay the shareholders and ceos as much to be able to keep employing as many people as they are today, even if they now would have to pay their fair share of tax? Yes.

[@SuperDarius01]

Yeah, but 45 fucking percent is not fair share. 30 percent maybe.

[@aerohk]

I thought people from Apple never wear tie.

[@aerohk]

***** They refused to wear tie when negotiating a deal with AT&T for their first iPhone even when they were advised to.

[@danielx40]

Thought he's gonna pull out a new product right there.

[@john_carter8243]

Government: "We can't spend money efficiently... please give us more money!"

[@LiveBetterSaveMoney]

The US shouldn't tax foreign earnings. Simple as that.

[@jpacer6645]

+LiveBetterSaveMoney the US provides FTC.. foreign tax credit so the same profit isnt taxed twice over the 35% rate. Therefore if foreign tax is 15%, they still liable for the additional 20%. All income world wide is taxable at 35% but you get a credit for prior paid foreign taxes paid.

[@myohmy451]

LiveBetterSaveMoney Agreed. And crooks in office bribe, threaten and intimidate corporations to cooperate with them and their rogue little goon operation via FBI & CIA spies, and they do it to whistle blowers, everyone and anyone they deem a threat or liability, or in the way. Some in our gov want this to be another banana republic. I hope President changes this new tax plan and kicks these Dems and progressive Republicans contributions to the curb. As usual, Congress wants to take away all the deductions which will hurt, not help the middle class. They lower the tax rates, but they won't lower the government's massive domestic spending, on wasteful abuses that surpass our gross domestic earnings. They will lower corp tax rate to bring back jobs, but should be ZERO! They are double taxed by other governments where they open businesses do sales, then if they're dumb enough, bring their profits minus the taxes paid overseas, to the US where their own government taxes them more heavily than any other government on the planet, take 35-40% MORE of their profits. If we stopped punishing our companies for being successful, productive, they could bring their money back here without being robbed by our gov. Think of the multiple trillions they could invest in building up our economy, providing research and development, building business opportunities, education, lucrative markets and jobs, for our citizen's. The corporation big and small could keep their money in our banks, helping grow our economy, our opportunities. The benefits would be massive for our average citizens. Ford Motor Co., used to donate millions yearly to ALL of Dearborn schools, other city schools in Wayne Co., colleges, so that parents never had to provide any school supplies, nor sports fees or uniforms, they were committed to picking up ALL the costs that parents now must pay entirely, but despite the benevolence of some generous businesses, corporations, our government imposes massive taxes and regulation which destroys incentive and initiative to continue their philanthropic gifts. Meanwhile school taxes, local taxes must go up as our gov continues to squander the money they fleece successful business men of. Watch the Dems & RINOS (Republicans in name only, secret progressives), try to subtly, and not so subtly, bully this guy or any company who tries to explain the conundrums they must deal with. How dare anyone question or oppose being taken advantage of by our government.

[@SHGames97]

Seriously seemed like he was trying to sell me something the whole time

[@TheTDCStudios]

Solid gold reaction of him buckling at 23:45 - should become a meme!

[@Greenmike17]

Steve Jobs wouldn't have called John MCcain sir. Lol but I understand Tim Cook's reasoning.

[@iCTechReviews]

Mr. OPPEN Gangnam style! *whole room erupts in dance...

[@polozine]

His opening statement seemed like he was trying to sell me something..

[@KerrieRedgate]

This has nothing to do with tax avoidance. Tim Cook offered to help this committee of US Senators with restructuring US tax reform for large corporations so that US companies can bring their overseas-earned & taxed cash home to the US which would stimulate the US economy and local investment, even though his plan would cost Apple more in taxes in the long run (Apple are the top tax paying company in the US). You have to watch the episodes to get this. There is no trial here. It's a commission for tax reform to also help make US products more competitive with overseas brands. The Senators were very grateful for his help.

[@teambnb9947]

I support Tim Cook. I oppose hungry money politicians.

[@aldeen1982]

amazin quality in 2016...

[@BlazinNSoul]

Where us Steve Jobs when you need him. He would have had congress out for lunch, oh wait. :)

[@213kidangel]

Government vs Free-Markets!

[@b.aguiar90]

this is the same guy from the inside job documentary right ?! haha

[@brandtmccall5862]

Cook, Oppenheimer, and Bullock were all very humble and polite, as well they clearly put alot of care and work into preparing for this senate hearing. They have credibiitliy, Cook is very sincere, and down to earth, and thorough, he barely read his notes and seemed to have his talk largely memorized. Apple creates 1000's of good paying, jobs in the US and a positive work environement as well as Cook stated Apple does pay it's taxes it is legally required to.

[@ShaneHill69]

oh, its Tim Apple!

[@proudglobalist1099]

Apple vs tax system 1-0

[@ItsZackk]

It's amazing that the government can feel compelled to create all of these sub committees to determine whether corporations try to dodge tax law and not even consider that the system might be broken/may be negatively impacting US companies.

[@vastoholic2]

For the built to order upgrades yes, but if you build a tower nearly spec for spec as a base Mac Pro, the price difference in negligible. The upgrades are where the price hikes really are for Apple.

[@nicegustov]

Tim Cook is a badass. I have so many feelings over this hearing. But I Love his Attitude.

[@MrTaoDe]

WOW, 35% tax for importing for foreign income, that's really tough for a native company in US. Even the company may use some methods to minimize the tax impact, it is quite understandable.

[@xGoo]

Is he giving a keynote to the damn judge... seriously...

[@Elmgren76]

Then a Ralph Lauren polo shirt is overpriced if you compare the cost for textiles. There is no such thing as overpriced products unless the prices are set by the government.

[@digerpaji]

pretty cool hearing

[@salahuddincook1083]

Talking About my twitter account for Christmas but I'm not even going out with my phone for Christmas because I don't have twitter.

[@ChrisMorgan86]

I don't know what worst Apple Tax Senate hearing, or the fact Tim Cook show up wearing a suit !

[@Noah-Lach]

TL:DR "We're paying exactly what we're legally required to. Don't like it? Change the laws."

[@TheDracarys]

I wish he spoke this fast during his keynotes as well

[@TheTDCStudios]

Damn straight.

[@VICARI0S]

Wrong. Just look at the pricing of Apple desktops. The specs are not only twice as low as others in performance, but they price (i.e. stick of RAM) the parts at almost twice the price.

[@alvinzc]

The most energetic Cook I had ever seen on screen.

[@orlandotaxattorney]

There are two main types of tax deductions: the standard deduction and itemized deductions. You can claim one type of deduction on your tax return, but not both. For example, if you claim the standard deduction, you cannot itemize deductions - and vice versa (if you itemize deductions, you cannot claim the standard deduction). You are allowed to use whichever type of deduction results in the lowest tax.

[@MrWaheedulHaque]

whats the difference between the 2

[@WelshDegenerate]

Am with Apple on this one. Cook is completely right and Apple are doing nothing wrong, by any laws... They pay US taxes on their US profits. They pay foreign taxes, on their foreign profits. These holding companies simply store those foreign profits... they don't avoid anything... they're after tax NON-US profits, so why the hell should they pay US tax on that as well. They then pay US tax on any profit made from that cash, since they operate from the US. Cook is 100% right.

[@FAC1806]

I find it funny that that Cook and Oppenheimer did not read their statements from an iPad!

[@Elmgren76]

How are they over pricing their products? They're setting prices that the market is willing to pay, the same for every company that competes with them.

[@davidwalsh6608]

The issue is if the money earned offshore (net of offshore taxes) was returned to the USA it would be subject to 35% tax less the percentage tax incurred in the country where it was originally earned. Me McCann argued that gave Apple an advantage over a USA company that did not trade offshore at all. Is not the argument that Apple traded in the USA and paid taxes on its USA income in the USA. There is no restriction on USA companies trading in lower offshore tax areas if they so wished. Also Apple is constantly investing funds in the expansion of their offshore business, why would they send their offshore cash back onshore lose 35% of it and then send it offshore again to pay for new shops and factories.

[@zeaumedia9907]

Bullock is sweating bullets! lol

[@MrChip1841]

Steve always read from a paper. He was just very discreet about it

[@kawaiidoggo]

Macs sold for over $1000 for a substantially better quality and PCs sold under $1000 for the same quality. Apple is setting their prices on the market.

[@rhcp211]

You're not wrong from an economics standpoint, but we both know that's not what he's talking about. He's saying they charge more for their stuff than any other company would simply because they can get away with it due to some ridiculous idea that their products are god's gift to the world.

[@OffroadGeekDxb]

LOL...Mr. Bullock trying to roll the answers instead of giving a clear one! 22:40 Mr. Levin asks the same question several times, but the answer is just plain simple... NO. Regardless of income being taxed in their respective countries, if it comes to the US or any other country, that income is subject to tax laws of the receiving country. Simple as that. Anyone should know that.

[@AfroNinjaX]

He keynoted the whole subcommittee, if he wasn't an executive, alot of people would say that he had balls for doing so.

[@mikal_1]

they were supposed to pay almost 25 billion in taxes. they payed 5.3 billion.

[@riky95oo]

you know, Steve wouldn't have needed to read the words from a piece of paper..

[@jrphillip1458]

The late John McCain is amazing.

[@terrythompson7535]

They didn't avoid QUANTITATIVE EASING to buy back stocks, while the rest of us pay back that money to the private shareholders of stock of central banks for "loaning" money created out of thin air..

[@thestonemaster81]

The takers want to take more

[@Luix]

13billion tax bill by European Union for private taxe contract in Ireland.

[@drehmer]

This judge have a combover

[@rhcp211]

Most normal companies see how much the item cost to make and then set the price based on that. After that, they adjust the price based on how many people are buying. The problem with a company like Apple is that they know people will buy anything they put out for just about any price so they sell their stuff with enormous markups. Just look at how much they charge for stuff like RAM and monitors compared to what other companies charge for superior products.

[@chaozkreator]

and who's there to force every consumer to buy Apple products? Don't blame the game, blame the player.

[@ricksalt6860]

Cayman Islands tax haven , $1.6 trillion nontaxable wealth . The largest tax haven , London . Luxembourg , Switzerland , Jersey , Guernsey ,Ireland all tax havens . Hundreds of companies with no tax residency . These Co. live on Elysium , just like the movie . Global economy needs global tax laws .

[@WillHandwilljan]

is that an insult to fanboys. Watch your back haha

[@rhcp211]

It's amazing what the Apple fanboys did to your comment.

[@joshmaclean3179]

Things are pretty sad when a huge company like apple have been ordered to pay their European Tax Bill by the European union and they say "No" When a corporation becomes so cocky and so confident to say no to paying their tax bill. SOMETHING IS SERIOUSLY WRONG!

[@MarkZgaljic]

I feel like half the people commenting didn't even watch the entire video. Just my opinion lol

[@damiantorn5799]

Co behav is usually diff, depends: private or public. I've wkd mostly w/private Cos who charge what the market will bear w/a focus on long-term "greed", creating a sustainable, livable LTcashflow/profit. But private Cos MUST maximize shareholder wealth qtr to qtr being "now" greedy, for the most part. Apple has a relationship with its mkt like Harley-Davidson does. It's a cultural pehenom, not just doll/cents. Belonging has a premium attached. Those of us not emot attached to stuff have more $

[@iMatthewCM]

The chairman needs a new hairpiece. C'mon dude, if Tim can put on a tie, you can comb your hair.

[@Sean2046]

Boggles my mind the amount of people here whining about how Apple isn't being stolen from as much as them instead of speaking out against people being stolen from being wrong in the first place. Taxation is theft people. When did anyone ever consent to being taxed?

[@zooopy3480]

Fuck taxes.

[@YoungHorusMedia]

This guy is a politician not a technician. It's over for Apple.

[@Immortalkalashnikov]

YoungHorusMedia Still believe that? lol

[@ahf5471]

Did you actually listen to anything he had to say?? Or did you already pass judgement when you read the title?

[@stevengriffin3810]

He has an MBA so he's more of a businessman

[@PvtNoclass925]

Apple is still here....

[@jpacer6645]

the key to Cooks Testimony is simple... 30:00 after McCains question. Yes, under IRS code Apple pays low tax to Foreign Govt on Foreign Profits, But still pays 35% on Domestic and International Profits, given they get credit for paying that low Foreign Tax with Foreign Tax Credit. As Cook stated there is no shifting going on.. See Form 1120 line 1, where you enter ALL Global Consolidated Entity Sales (revenues) Its that simple...

[@TheGarvito]

wow kids here don;t understand whats happening here.

[@t1mmy13]

I wonder if Steve Jobs would have put a suit on for this

[@timbuktu1]

Like me, as American citizen living overseas i have to pay taxes from my income all over the world. Believe me, i pay proportionally more taxes than Apple. Yes, government is a mess.

[@jesuisbecoming6636]

Who is the Pretty girl seated behind Senator McCain ?

[@Warlord795]

what does anything from the first 10 minuites of his testimony have to door with his OFFshore profits?

[@jandavies8515]

Why should Apple pay taxes for the profits earned outside of the us to the us treasury? Taxation doesn't work like that. The us government cannot make them pay taxes on profits earned out side of the us.

[@mikevike106]

The point is they are AVOIDING taxes by doing it overseas, and then bringing it back here.

[@lalobrit9]

That's how americans think. Pay us everything because we say so.

[@manicdee983]

mike vike they avoid taxes by doing the transactions overseas, and then not bringing it back to the USA at all. The USA wants to take about 30% of everything that these multinational companies would otherwise bring into the USA. That money will just be leaving the USA again anyway, so the multinationals keep the money as far away from taxation offices as possible. They're just doing exactly what the tax system tells them to: to keep your money, don't bring it into the USA.

[@mikevike106]

Alex Satrapa and if YOU did this, you'd go to jail.

[@manicdee983]

No, if I did this I'd have to be rich since I don't have the money to set up offices in Ireland and the Netherlands.

[@andretaylforth]

of course their products are overpriced, just compare specs from their laptops to laptops with the same specs from other companies

[@salahuddincook1083]

Pecah telurnya besarnya Indonesia

[@5dayslater]

Architects - These Colours Don't Run Good job, Apple. You're doing great. Stand out in the crowd and keep your mind open.

[@SynthieFlowers]

Google is the future.

[@owenwu8]

who notices apple always is so good about bragging about themselves with words like - revolutionary, innovation,etc

[@waRr3nxx]

Oh man I would have loved to see Jobs talk to these guys. They woulda packed up in 5 minutes.

[@kazora1001]

Wtf? He isnt even talking about his taxes

[@MrJc9600]

Yeah lol, I feel like I am watching an Apple keynote rather than a court hearing

[@commonsense31]

Well I don't give a danm about your company you still have to pay taxes

[@bare-bonesjoe4897]

I bet Tim Cook wrote the questions for the committee to answer.

[@lilblackfish2009]

Why aren't apple products made in the us instead of china

[@salahuddincook1083]

Docketed PNS bisa Memiliki banyak aparmetment Kalah docter gigi nya swiss

[@dorkface91169]

because of over regulation, minimum wage and tax. If so they make it America they could not compete with globalize markets

[@imohammedshaikh6835]

and they are not doing anything about common people

[@sodaman2006]

The 30 billion is after tax income put into an investment holding company called AOI. It's like a bank that holds your money and invests it. Profits made off the investment are tax in the U.S. to Apple inc. The interest off the 30 billion is taxed at the Ireland rate of 2% because that is where the money resides. You shouldn't get taxed again for moving your money from one country to another.

[@davidwalsh6608]

I think that the issue is the interest earned on the money held is taxed at USA rates less tax paid offshore as it is a source of income. However the money held by AOI if returned to the USA would also be taxed at 35% less tax paid where it was earned offshore. What Apple is doing is not returning the funds back to the USA but using it to fund offshore investments in new shops and offices. But also because the companies income is the sum of all after tax earnings, and because corporation taxes are lower offshore. Apple's after tax earnings are boosted. When they pay dividends to shareholders who are disproportionately US citizens they have to borrow money in the USA to pay the dividends as they have not repatriated the offshore earnings. The interest on the loan is then a US tax deduction.

[@jesuisbecoming6636]

So, Apple Overseas Income, = Minus no Irish Tax, helps to pay the High Dividends for Apple Globals Shares and keep its Stock price !

[@damiantorn5799]

Yes, yes, yes . . . True - BUT 1) Greed is NOT a trait that automatically brings in money. 2) NO ONE is forced to by any Apple product(s) at any price! It is illogical & irritating to see ppl complain about things that are rooted in personal choices. (I've never owned any Apple product & they have never been a part of any aspect of my finanical condition. Why should I be angry with them?) Most ppl I see w/"smart" technology waste time & $ being stupid by choice. That's not Apples' fault. =-\

[@TheAfroChild]

So glad I work for apple! haha

[@salahuddincook1083]

DPRi centre Criminal Taxes indonesia

[@TheZEYNUDDIN]

I think, Tim Cook is going to cry against McCain

[@Sakabatou1821]

I believe, after watching this, that Apple Inc. definitely goes out of their way to dodge taxes; not only in the US, but globally. Thank you for this. An informed consumer is a better consumer. The concept of fairness is lost to corporate America.

[@gustfront180]

I just love this- LIARS testifying before OTHER LIARS.

[@trancemisho]

who is the girl behind mccain?