Apple CEO Tim Cook went to Washington Tuesday, prepared to fire back after a Senate panel reported that the company famed for its iPhone and iPads was infamous for corporate tax avoidance.
Cook, Apple CFO Peter Oppenheimer and Phillip Bullock, the company’s head of tax operations, were scheduled to be the star witnesses testifying in a public hearing showdown with the Senate Permanent Subcommittee on Investigations.
Along with defending Apple’s tax strategies, Cook is expected to propose a simplification of corporate tax laws that would encourage U.S. firms to bring foreign earnings back home for job creation and economic investment.
The expected testimony was to respond to the Senate panel’s scathing Monday report that said Apple avoided tens of billions of dollars in U.S. taxes on its income and profits by shifting the funds through a global web of offshore entities — including three that had no tax residency in any nation.
The three entities were run by some of Apple’s top executives but were located, on paper, in Ireland, though they in some cases had no employees. One reported $30 billion in net income for 2009-2012, yet filed no corporate tax return and paid no income taxes to any government during those years, according to the report.
Another affiliate received $74 billion in sales income over four years, but paid taxes “on only a tiny fraction of that income,” the report said.
Apple also transferred economic rights for some of its intellectual property to its offshore affiliates in low-tax jurisdictions, saving tens of billions of dollars in levies, the Senate panel concluded in its latest look at corporate tax avoidance tactics.
The company then went a step further by using U.S. tax loopholes to avoid federal taxes on $44 billion in otherwise taxable offshore income from the intellectual property rights during the last four years, the report said.
“Apple wasn’t satisfied with shifting its profits to a low-tax off-shore tax haven, Sen. Carl Levin, D-Mich., the subcommittee chairman, said Monday evening. “Apple successfully 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.”
Arizona Sen. John McCain, the panel’s ranking Republican, said Apple “should not be shifting its profits overseas to avoid the payment of U.S. tax, purposefully depriving the American people of revenue.”
In written testimony filed with the subcommittee on Monday, Apple said “in accordance with U.S. law,” the firm “pays U.S. corporate income taxes on the profits earned from its sales in the U.S. and on the investment income of its controlled foreign corporations.”
Insisting it doesn’t use “tax gimmicks,” Apple said it does not move intellectual property to
Article source: http://www.usatoday.com/story/money/business/2013/05/21/apple-tax-hearing/2344351/
It’s an amazing but accurate statistic: 87% of Fortune Global 100 companies now use one or more of the major social media platforms to communicate.
