Cook defends Apple’s US tax avoidance before lawmakers

22 May 2013

1

Tim CookTim Cook, chief executive officer of US technology giant Apple Inc, yesterday appeared before a Senate committee in regard to tax evasion by his company through Irish subsidiaries, but was far from apologetic.

He told the lawmakers that Apple backs corporate tax reform, even though it may end up paying more.

Congressional investigators allege that even as Apple became the nation's most profitable technology company, it avoided billions in taxes in the United States and around the world through a web of subsidiaries so complex it spanned continents and went beyond anything most experts had ever seen, Congressional investigators disclosed.

The development comes even as other American multinational giants like Google, Amazon and Starbucks are under investigation by UK parliamentarians as well as American lawmakers for tax avoidance.

A common thread is the use of Ireland as something of a tax haven. The US Senate committee had on Monday argued that Apple's complex structure includes three Irish-based subsidiaries that appear not be a tax resident anywhere in the world.

The Senate Permanent Subcommittee on Investigations has found that Apple in 2012 alone evaded $9 billion in US taxes using a strategy involving the Irish offshore units, with no discernible tax home, or "residence."

The issue has created much heartburn among the public in these recession-hit countries. But many economists have argued that the companies are perfectly justified in minimising their tax burden; while UK Prime Minister David Cameron has argued that such practices cannot be curbed without an international law.

Cook, in his first congressional testimony since becoming Apple CEO in 2011, said his company is a major taxpayer, having paid nearly $6 billion to the US government in 2012.

"We expect to pay even more this year," Cook said. "We pay all the taxes we owe."

But Senator Carl Levin, chairman of the subcommittee and a veteran tax sleuth, said Apple had sought "the Holy Grail of tax avoidance," creating one Irish unit that paid no income taxes to any national tax authority for the past five years.

Business History Videos

History of hovercraft Part 3...

Today I shall talk a bit more about the military plans for ...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of hovercraft Part 2...

In this episode of our history of hovercraft, we shall exam...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of Hovercraft Part 1...

If you’ve been a James Bond movie fan, you may recall seein...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of Trams in India | ...

The video I am presenting to you is based on a script writt...

By Aniket Gupta | Presenter: Sheetal Gaikwad

view more