- 7 updates
After questioning Apple CEO Tim Cook in a congressional hearing into their tax affairs, Senator John McCain said he was sorry they had run out of time as he had been meaning to ask a question that seemed to have been troubling him. As the hearing ended he said:
"What I really wanted to ask is why the hell I have to keep updating the apps on my iPhone all the time and why you don't fix that?"
Cook responded the company was "trying to make them better all the time."
The Irish government have denied the country operated as a "tax haven" for global technology giant Apple. Ireland's deputy prime minister Eamon Gilmore told national broadcaster RTE:
"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."
His comments come after the US Congress released a 40-page document cataloguing possible reasons the group paid just 1.9% tax on its $37 billion overseas profits in 2012.
The report said: "Ireland has essentially functioned as a tax haven for Apple."
Apple's chief executive, Tim Cook , told the US Congressional hearing into their tax practices that the company pay everything they are supposed to. Denying any impropriety he said:
"It does not use revolving loans from foreign subsidiaries to fund its domestic operations; it does not hold money on a Caribbean island; and it does not have a bank account in the Cayman Islands."
Apple CEO Tim Cook is set to testify and explain the company's tax strategy at a subcommittee hearing today.
The technology giant has avoided paying billions of dollars in US taxes by using "offshore entities", according to the report.
"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."
Committee member and former Republican candidate for the US Presidency John McCain added: "While Apple claims to be the biggest US corporate taxpayer, it is also among America's largest tax avoiders."
Apple said in a comment posted online that 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 $7 billion in US taxes in 2013.
In submitted testimony ahead of the hearing, Apple said any tax reform should favour lower corporate income tax rates regardless of revenue, eliminate tax expenditures and implement a "reasonable tax on foreign earnings that allows free movement of capital back to the US."
"Apple recognizes these and other improvements in the US corporate tax system may increase the company's taxes," it said.
Apple has been accused of employing a group of affiliate companies located in Ireland to avoid paying billions of dollars in US income taxes, a Senate investigation has alleged.
According to the report, Apple is holding around $102 billion of its $145 billion in cash overseas, and an Irish subsidiary that earned $22 billion in 2011 paid only $10 million in taxes.
But the committee said there was no indication Apple had done anything illegal. Many other multinational corporations use similar tax techniques to avoid paying US income taxes on profits they make overseas.
But the report found that Apple uses a unique twist, and lawmakers are raising questions about loopholes in the US tax code.