DETROIT (WWJ) – At a hearing Tuesday, Senators in both parties will put pressure on Apple Inc., questioning chief-executive Tim Cook, because the electronics company set up foreign subsidiaries only for the sake of avoiding U.S. corporate taxes.
Michigan Senator Carl Levin says these are gimmicks and loopholes that ought to be eliminated.
“We’ve identified the epitome of tax loopholes which need to be closed,” said Sen. Levin. “This is the definition of a tax loophole.”
The Senate report says Apple’s Irish subsidiary earned $22 billion in 2011, but paid only $10 million in taxes. Apple’s strategies are legal, and many other multinational corporations use similar tax techniques.
“What Apple has been able to do is create three phantom corporations in Ireland that don’t exist anywhere for tax purposes. Yeah, that is the epitome of tax creativity,” Levin added.
The Senate report says the world’s most valuable company is holding about $102 billion of its $145 billion in cash overseas.