A new report by Senate investigators accuses Apple of taking advantage of tax gimmicks and loopholes that help the company avoid paying their fair share of US taxes.
The report says that Apple pays ‘little or no corporate tax in any country’.
Companies, no matter who they are or how big they are, should be forced to pay the true amount of taxes they owe, and not be able to use all kinds of loopholes to stash money overseas.
Senate investigators accuse Apple of wiring together a complicated system to shield billions of dollars in international profits from both U.S. and foreign tax collectors.
A report released ahead of Apple CEO Tim Cook’s inaugural Capitol Hill appearance Tuesday alleges the tech giant took advantage of numerous U.S. tax loopholes and avoided U.S. taxes on $44 billion in offshore, taxable income between 2009 and 2012 — a characterization Apple flatly rejects.
The bipartisan Senate probe also charges for the first time that Apple’s long established foreign entities, based in Ireland, don’t actually have tax-resident status there or anywhere else. The company conducts most of its international business in the European country to take advantage of lower tax rates, according to the congressional report.
Despite the findings, lawmakers behind the inquiry did not describe Apple’s tax conduct as illegal — but they sharply rebuked the Cupertino, California-based tech heavyweight on Monday for its tactics.
“What we intend to do is to highlight that gimmick and other Apple offshore avoidance tactics so that American working families, who pay their share of taxes, understand how offshore tax loopholes raise their tax burden and how those loopholes add to the federal deficit,” said Sen. Carl Levin (D-Mich.), the chairman of the Permanent Subcommittee on Investigations. The panel initiated the probe with the backing of its top Republican, Sen. John McCain of Arizona.
Apple, meanwhile, emphasized it has contributed more than its fair share of jobs to the U.S. economy — and plenty of big bucks to the U.S. treasury, too. Its prepared testimony, also released Monday, said the company “pays all its required taxes, both in this country and abroad.” And Apple stressed it does not use “tax gimmicks.”
Still, the Senate’s report sets the stage for a fiery committee hearing Tuesday, one that also marks Cook’s first time testifying on Capitol Hill. It’s sure to be rife with theatrics: Levin’s panel castigated Microsoft and Hewlett Packard just last year for their own, unique methods to allegedly lower their corporate tax payments. That hearing, however, didn’t result in any meaningful changes to the companies’ practices or U.S. laws.
Apple has been subject of its own spotlight since The New York Times in 2012 illustrated the company’s controversial efforts to sidestep steep U.S. taxes. Much of the Times’ initial report appears to be confirmed by the Senate’s latest findings. But adding new fuel to the fire: Apple’s decision to sell $17 billion in bonds to pay dividends and buy back stock, rather than tap some of the roughly $100 billion it’s stashed overseas. If brought back to the United States, Apple would incur a 35 percent tax on those dollars — a reality that’s prompted many businesses beyond the tech industry to avoid repatriating their foreign earnings.
For its part, Apple maintained in the advanced testimony that it is not dodging any U.S. taxes, funneling U.S. profits overseas or tapping revolving loans improperly, as the Senate committee explored last year.
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