Global technology giant Apple has been accused of evading billions of dollars in US taxes by using Ireland as a tax haven, US Congressional investigators disclosed.
The report claims that the computer maker has shielded around $74 billion in profits over the past four years from the US tax authorities by setting up subsidiaries in Ireland under a special arrangement.
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One of Apple’s Irish affiliates reported profits of $30 billion between 2009 and 2012, but because it did not technically belong to any country, it paid no taxes to any government. Another paid a tax rate of 0.05% in 2011 on $22 billion in earnings, according to the report. The US corporate tax rate is 35%.
"Apple wasn’t satisfied with shifting its profits to a low-tax offshore tax haven. 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," said Senator Carl Levin, chairman of the US Senate Permanent Subcommittee on Investigations which is holding Apple’s hearing.
Appearing before a US Senate hearing on tax, Apple’s head of tax policy Phillip Bullock confirmed that two Irish subsidiaries – Apple Operations Europe and Apple Sales International – paid approximately 2% in tax.
Tim Cook, Apple chief executive, defended the iPhone and iPad maker’s use of Irish companies. He said that the company was given a tax incentive by the Irish government when it set up in Ireland in 1980 as part of a recruitment drive to attract technology companies to establish operations in Ireland.
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By GlobalDataApple is the latest high-tech giant to have its offshore accounting practices come under congressional scrutiny.
The Irish government has denied the country operated as a ‘tax haven’ for Apple.
Ireland’s deputy Prime Minister Eamon Gilmore told national broadcaster RTE that they are issues that arise from the taxation systems in other jurisdictions, and that is an issue that has to be addressed first of all in those jurisdictions.
