WASHINGTON, May 21 (RIA Novosti) – The head of the US-based multibillion dollar computer firm Apple told a Senate panel on Tuesday his company has paid “every single dollar” it owes in taxes, despite a new congressional report that says Apple shifted billions of dollars in profits away from the United States and into subsidiaries in Ireland where it gets a special tax rate of less than two percent.
“Apple does not move its intellectual property into offshore tax havens and use it to sell products back into the US in order to avoid US tax; it does not use revolving loans from foreign subsidiaries to fund its domestic operations; it does not hold money on a Caribbean island; and it does not have a bank account in the Cayman Islands,” said Apple CEO Tim Cook.
“Apple has substantial foreign cash because it sells the majority of its products outside the US,” he said in opening remarks to the Senate Permanent Subcommittee on Investigations, which is looking into how multinational corporations are able to move profits to offshore tax havens and avoid paying US taxes.
The committee’s report, released on Monday, finds Apple has used a complex web of offshore entities to avoid paying billions of dollars in US income taxes.
“Apple sought the Holy Grail of tax avoidance. It has created offshore entities holding tens of billions of dollars, while claiming to be tax resident nowhere,” said Sen. Carl Levin, chairman of the subcommittee, in his opening remarks.
“We intend to highlight that gimmick and other Apple offshore tax avoidance tactics so that American working families who pay their share of taxes understand how offshore tax loopholes raise their tax burden, add to the federal deficit and ought to be closed,” Levin said.
“A company that found remarkable success by harnessing American ingenuity and the opportunities afforded by the US economy should not be shifting its profits overseas to avoid the payment of US tax, purposefully depriving the American people of revenue,” said Sen. John McCain, ranking Republican member of the subcommittee.
Cook told the panel that Apple paid nearly $6 billion in income tax payments to the US Treasury last year, roughly $16 million per day, and expects its US tax bill to increase to more than $7 billion this year. He said the company supports 600,000 American jobs.
"Apple has real operations in real places with Apple employees selling real products to real customers. We pay all of the taxes we owe…we not only comply with the laws, but we comply with the spirit of the laws," he said, adding that the US corporate tax system “has not kept pace with the advent of the digital age and the rapidly changing global economy.”
Tuesday’s hearing marks the second time the subcommittee has looked into the use of corporate loopholes to avoid US taxes. In September the panel looked into tax structures for Microsoft and Hewlett-Packard.