Politicians accuse Apple of avoiding $44 billion in taxes through offshore subsidiaries

Apple Store Politicians accuse Apple of avoiding $44 billion in taxes through offshore subsidiaries

According to a U.S. political committee headed by Carl Levin and John McCain, Apple avoided paying $44 billion in taxes through offshore entities and loopholes.

carllevin Politicians accuse Apple of avoiding $44 billion in taxes through offshore subsidiaries
(Sen. Carl Levin. Photo: AP)

In a recent subcommittee statement, Senator Levin claimed Apple sought the “Holy Grail of tax avoidance” by creating offshore entities which hold tens of billions of dollars while “claiming to be tax resident of nowhere.”  He added by saying:

“We intend to highlight that gimmick and other Apple offshore tax avoidance tactics so that American working families who pay their share of taxes understand how offshore tax loopholes raise their tax burden, add to the federal deficit and ought to be closed.”

According to that same subcommittee statement, one of Apple’s non-taxpaying entities, Apple Operations International, has not filed an income tax in its country of operation (Ireland) nor the United States within the last five years (2009-2012) despite having reported an income of $30 billion within that time frame.

Another Apple subsidiary, Apple Sales International, reported sales revenue of $74 billion, but only paid an “effective 2011 tax rate of only five hundreds of one percent.”

Apple responded to the committee’s accusation of tax avoidance by saying that it has not broken any laws, and that it is one of the few U.S-based firms that unload a hefty amount into the nation’s treasury each year.  Last year alone, Apple claims it paid roughly $6 billion in taxes, which amounts to about a $1 for every $40 in corporate income. 

Moreover, the Cupertino-based Apple believes that the nation’s corporate tax system is overcomplicated, and that the Obama Administration, along with members in Congress, should consider overhauling and simplifying the system.

“Apple has always believed in the simple, not the complex. This is evident in the company’s products and the way it conducts itself. In this spirit, Apple has recommended to the Obama Administration and several members of Congress…to pass legislation that dramatically simplifies the U.S. corporate tax system.” –Apple’s statement in full is found here.

A report on Tim Cook’s testimonies on Apple’s overseas operations will be released shortly.

Via Forbes

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