Apple 'among largest tax avoiders in US' - Senate committee

Apple has been accused of being "among America's largest tax avoiders".

A Senate committee said Apple had used "a complex web of offshore entities" to avoid paying billions of dollars in US income taxes. But it said there was no indication the firm acted illegally.

Apple chief Tim Cook will go before the panel on Tuesday. In prepared testimony Apple said it did not use tax gimmicks.

The Irish Republic, home to three Apple subsidiaries, says it is not to blame for the firm's low tax payments.

The US Senate had said that Apple paid little or nothing on billions of dollars in profits placed in Irish subsidiaries.

"They are not issues that arise from the Irish taxation system," Deputy Prime Minister Eamon Gilmore told national broadcaster RTE when asked about the Senate committee report.

"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."

Apple has a cash stockpile of $145bn (£95bn), but the Senate committee said $102bn of this was held offshore.

The company says it is one of the largest taxpayers in the US, having paid $6bn in federal corporate income tax in the 2012 fiscal year.

The Senate Permanent Subcommittee on Investigations has been examining "methods employed by multinational corporations to shift profits offshore".

Some large firms in the US have come under fire for their reluctance to repatriate their foreign earnings as they could face a top tax rate of 35%.

US corporation tax is one of the highest in the world at 35%. However, companies typically pay far less, thanks to numerous deductions and exemptions.

'Sham argument'

But rather than merely being a matter of taxation in the US, this is a subject of global importance - especially when multinational companies are concerned, according to senior officials on both sides of the Atlantic.

"What global companies are doing right now is playing one country off against the other country - on taxes, on wages, on subsidies," said Robert Reich, formerly President Clinton's labour secretary and now at the University of California at Berkeley.

"All they care about - and this is appropriate given that they are in the business of making money - is getting their taxes down, but that doesn't mean that we should buy into their sham argument," he told the BBC's Today programme.

Jose Manuel Barroso, President of the European Commission, meanwhile, called for European Union countries to automatically exchange income tax data, saying tax evasion in the EU cost euro 1tn ($1.2tn; £840bn) a year, "nearly double the 2012 combined annual budget deficit of all member states".

'Holy Grail'

In its report into Apple, The Senate Permanent Subcommittee on Investigations chairman Carl Levin said: "Apple wasn't satisfied with shifting its profits to a low-tax offshore tax haven.

Read More: http://www.bbc.co.uk/news/business-22600984