The Securities and Exchange commission has closed its four-month review of Apple’s finances, having found nothing at fault with Apple’s handling of its overseas holdings and the relevant tax laws.
The SEC contacted Apple in a letter, telling them that having completed a review of Apple’s 2012 financial report, no action was to be taken at this time. According to the SEC, Apple’s taxes are accounted for properly, and their methods fall in line with standard practice. The Permanent Subcommittee on Investigations had previously claimed that Apple used the “Holy Grail of tax avoidance” to dodge taxation on $74 billion worth of profits in 4 years. The accusations were followed up by numerous demonstrations from angry members of the public outside Apple stores. It looks like most of those claims were unfounded, and in terms of overseas practice at least, Apple is now in the clear.
However, Apple’s dealing within the United States are still under investigation, and the legality of those practices will be determined by the IRS. It is yet to be established whether or not Apple’s tax dealings under U.S. laws are in fact lawful. When submitting evidence to the subcommittee, Tim Cook repeatedly called for a massive shake-up of the corporate tax code which would make policies clearer and laws easier to comply with. It’s most likely that, through clever financial strategy, Apple has in fact managed to avoid paying certain taxes by exploiting loopholes, and simply being careful with its money. Many people would consider that immoral, yet if Apple is indeed acting within the boundaries of U.S. law, then such accusations have no real objective founding. As a corporation, Apple is within its right to earn as much money as possible, so long as it operates on the correct side of the law. If it is found that despite this, Apple is paying a relatively small amount of tax compared to other companies, then it is up to United States to determine how it should be solved.