Apple’s Irish units paid no tax on $100bn
Senators Carl Levin and John McCain made a series of revelations about Ireland and its use by the multinational giant Apple to avoid paying tax on billions of dollars of revenue.
It comes ahead of a US senate hearing today on Apple’s tax activities and its relationship with Ireland going back three decades.
The senators claim one Apple subsidiary incorporated in Ireland paid no tax on $30bn of revenue between 2009 and 2012.
A second incorporated in Ireland paid a tiny fraction — just 0.05% in 2011 for example — on total reported income of $74bn over the same period.
These companies’ activities are in addition to the main company in Ireland, which, the senators allege, negotiated with the Government an effective tax rate of just 2% in 2012, far below the standard corporate tax rate of 12.5%.
While there has been much debate on the use of Ireland by multinationals to substantially lessen their tax burden, the allegations about the Irish subsidiaries are new.
Apple chief Tim Cook will answer questions at the Permanent Senate Committee on Investigations today.
Mr Levin, a Democrat, and Mr McCain, Republican and former presidential candidate, will be among the panel grilling Mr Cook.
Ireland will be very much in the firing line of the committee today.
“Apple was not satisfied with a low-tax, offshore tax haven,” said Mr Levin, an aggressive and long-time opponent of the multinational company’s use of tax avoidance schemes.
“Apple 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.
“We intend to highlight the gimmick and other Apple offshore tax avoidance tactics so that American working families who pay their share of taxes understand how offshore loopholes raise their tax burden.”
Mr McCain said: “Apple claims to be the largest US corporate taxpayer but, by sheer size and scale, it’s almost America’s largest tax avoider.
“It’s important to understand Apple’s byzantine tax structure so that we can effectively close the loopholes utilised by many US multinational companies.”
The senators, in a 40-page memo published last night, outlined what they claim is Apple’s use of Ireland to avoid paying huge amounts of tax to the US.
Apple revealed its testimony a day ahead of the senate hearing. It includes a defence of what it calls the “extraordinary” amount of taxes Apple says it pays. Apple said it paid nearly $6bn in US income taxes in the last fiscal year and that its US federal cash effective tax rate was 30.5% last year.
