Apple investigated over tax loopholes

Tax avoidance allegations have now been made against the huge Apple corporation in the US.

A government report has estimated that Apple, considered the world’s second largest company after Exxon, avoided at least $3.5bn (£2.3bn, €2.7bn) in federal taxes in 21011 and $9bn last year.

The Senate investigations sub-committee said the group funnelled most of its profits into subsidiaries in the Irish Republic, where it had struck a deal allowing it to pay only 2% on profits.

The report said: “A number of studies show that multinational corporations are moving ‘mobile’ income out of the US into low- or no-tax jurisdictions, including tax havens such as Ireland, Bermuda and the Cayman Islands.”
Democrat Senator Carl Levin told a hearing of the sub-committee that Apple’s exploitation of loopholes in the US tax code was unique among multinationals. The group used five companies located in the Irish Republic to conduct its complex tax strategy, the report had said.

Philip Bullock, Apple’s head of tax operations, told the hearing that AOI, an Irish subsidiary, had received $30bn during the past five years but was not required to pay taxes on it in the US. Chief executive Tim Cook admitted that Apple kept $102bn of its total $145bn in cash overseas but this money was not subject to US tax.
However, Cook declared: “We pay all the taxes we owe, every single dollar. We don’t depend on tax gimmicks.”