Apple Highlights U.S. Tax Code Challenges Impacting Its Global Competitiveness
Explore how Apple's executives discuss the disadvantages posed by the U.S. corporate tax system compared to international competitors like Samsung, and the implications for global business.
During a U.S. Senate Subcommittee hearing focused on offshore profit repatriation and tax avoidance, representatives from Apple expressed concerns about the disadvantages imposed by the American corporate tax system. They emphasized that the U.S. tax code puts Apple at a competitive disadvantage compared to Samsung, particularly regarding tax rates, with Samsung benefiting from lower corporate taxes.
Apple, like many large corporations, actively utilizes available legal avenues to minimize its tax liabilities. However, the company pays a 35% tax rate on profits brought back into the United States. In contrast, Samsung operates primarily out of South Korea, where the corporate tax rate is significantly lower at 25%. Peter Oppenheimer, Apple's Chief Financial Officer, described this disparity as unfair, stating, "Samsung can freely shift their earnings internationally, a flexibility we do not have."
Ohio Senator Rob Portman challenged these claims, arguing that Apple enjoys favorable conditions. He pointed out to Apple CEO Tim Cook and CFO Peter Oppenheimer that both Apple and Samsung are subject to similar global tax obligations, averaging around 14% worldwide.
While some believe the U.S. tax system provides substantial benefits and incentives to American companies, contributing to the success of tech giants like Apple and Google, the reality is more complex. Many American corporations themselves feel constrained by the tax code, which they argue hampers their ability to compete effectively on the international stage.
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