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May 20, 2013

Senate Panel Accuses Apple of Using Complex Tax Loopholes

by VOA News

A U.S. Senate committee says Apple has avoided paying taxes on billions of dollars in profits by setting up a complex network of off-shore entities.

The Senate panel says Apple created foreign subsidiaries with no employees or physical offices so it would pay little or no taxes on its earnings. It says Apple is holding $145 billion in cash, of which more than $100 billion is held offshore.

Apple chief Tim Cook is scheduled to go before the panel on Tuesday.

It is common for multi-national corporations to use offshore subsidiaries to avoid U.S. taxes and the Senate report does not accuse Apple of any illegal activity. However, lawmakers say that Apple is using new methods to create tax havens and they are raising questions about loopholes in the U.S. tax code.

In its written testimony to the committee, Apple denied using tax gimmicks and noted that it paid roughly $6 billion in U.S. taxes last year.