Apple CEO Faces Senate Panel On Tax Issues
This was however the first time that Cook testified before the panel voluntarily appearing with Apple chief financial office Peter Oppenheimer and Head of Tax Operations Phillip Bullock.
As Senator Carl Levin, Democrat of Michigan says, Apple’s loopholes in the U.S. tax code are ‘unique’ among multinational corporations. The firm uses five companies located in Ireland to carry out its tax strategy. These companies are located at the same address in Cork, Ireland and share members of their board of directors. Two out of them also have their tax residency in that country.
With regards to tax residency, Apple is said to capitalize on a difference between U.S. and Irish rules. To be a tax payer in Ireland, a company must be managed and controlled in the country. Whereas, according to the U.S. law, a company is a tax resident only if it was established within the country. Therefore in Apple’s view, its companies are not tax residents of Ireland or U.S., since they were not incorporated in U.S.
According to the U.S. tax code, there are certain provisions designed to make companies sell their products overseas to pay U.S taxes on the profits from those sales. But certain excuses allow firms to legally get around with those provisions. The committees report says that Irish subsidiaries are there to take advantage of these loopholes.
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