x Abu Dhabi, UAEThursday 27 July 2017

Apple and US Congress spar over taxes

Using an unusual global tax structure, Apple has kept billions of dollars in profits in Irish subsidiaries to pay little or no taxes to any government, a US Senate report on the company's offshore tax structure said on Monday.

Using an unusual global tax structure, Apple has kept billions of dollars in profits in Irish subsidiaries to pay little or no taxes to any government, a US Senate report on the company's offshore tax structure said on Monday.

In a 40-page memorandum released a day before Apple chief executive Tim Cook is scheduled to testify before Congress, the Senate's Permanent Subcommittee on Investigations identified three subsidiaries that have no "tax residency" in Ireland, where they are incorporated, or in the United States, where company executives manage those companies.

The main subsidiary, a holding company that includes Apple's retail stores throughout Europe, has not paid any corporate income tax in the last five years.

The subsidiary, which has a Cork, Ireland, mailing address, received US$29.9 billion in dividends from lower-tiered offshore Apple affiliates from 2009 to 2012, comprising 30 per cent of Apple's total worldwide net profits, the report said.

"Apple has exploited a difference between Irish and US tax residency rules," the report said.

Apple said in a comment posted online on Monday it does not use "tax gimmicks." It said the existence of its subsidiary "Apple Operations International" in Ireland does not reduce Apple's US tax liability and the company will pay more than $7bn in US taxes in fiscal 2013.

Subcommittee staffers said on Monday that Apple was not breaking any laws and had cooperated fully with the investigation.

 

* Reuters