updated 07:11 pm EDT, Mon May 20, 2013
Apple to be used as example of corporate tax avoidance in US
In the wake of Apple's published testimony, US Senators Carl Levin (D-MI) and John McCain (R-AZ) have released their own joint statement on the work of the Senate Permanent Subcommittee on Investigations. "Apple Inc. has used a complex web of offshore entities -- including three foreign subsidiaries the company claims are not tax resident in any nation -- to avoid paying billions of dollars in U.S. income taxes," Levin's office writes.
"Apple wasn't satisfied with shifting its profits to a low-tax offshore tax haven," Levin himself is quoted as saying. "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 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."
"Apple claims to be the largest U.S. corporate taxpayer," says McCain, "but by sheer size and scale, it is also among America's largest tax avoiders. A company that found remarkable success by harnessing American ingenuity and the opportunities afforded by the U.S. economy should not be shifting its profits overseas to avoid the payment of U.S. tax, purposefully depriving the American people of revenue. It is important to understand Apple's byzantine tax structure so that we can effectively close the loopholes utilized by many U.S. multinational companies, particularly in this era of sequestration. I have long advocated for modernizing our broken and uncompetitive tax code, but that cannot and must not be an excuse for turning a blind eye to the highly questionable tax strategies that corporations like Apple use to avoid paying taxes in America. The proper place for the bulk of Apple's creative energy ought to go into its innovative products and services, not in its tax department."
The statement mentions that on Tuesday, in addition to CEO Tim Cook, other Apple executives giving testimony in front of the Senate will include CFO Peter Oppenheimer and tax operations head Phillip Bullock. Non-Apple witnesses will include Harvard professor Stephen Shay and Villanova professor J. Richard Harvey, as well as Treasury Assistant Secretary for Tax Policy Mark Mazur, and IRS Director of Transfer Pricing Operations Samuel Maruca.