U.S. Senators Push Apple for Details on its Irish Subsidiaries, Taxes it Owes Worldwide

By

The public got a rare glimpse into the method Apple uses to minimize its global taxes – during a series of exchanges between the company’s top executives and members of the U.S. Senate on Tuesday, May 21st.

It was also revealed this week thatApple owns Apple Operations International (A.O.I.), Apple Operations Europe (A.O.E.) and Apple Sales International (A.S.I.) – three subsidiaries based in Ireland.

They are profitable. For instance, A.O.I reported it earned some $30 billion in income over four years, but has no employees nor has it “filed an income tax return in any country for the last five years,” The Los Angeles Times reported, based on information released by the Senate's Permanent Subcommittee on Investigations. Also, A.S.I. “holds the economic rights to Apple's intellectual property in Europe, Asia and Africa. The subsidiary had $74 billion in sales income from 2009-2012 but paid less than 1% in taxes to Ireland,” the report adds.

Several senators have claimed that Apple uses the subsidiaries in Ireland to shield billions of dollars in income from U.S. taxes.

“That’s the golden goose, your crown jewels” Senator Carl Levin (D-Mich.) told top Apple executives, adding that Apple has $100 billion in profit between those three companies.

“You shifted the economic rights to the most valuable thing you own, intellectual property [to the Irish corporation],” Levin told the executives, news reports said. “That’s the facts. And now those profits are abroad.”

But Tim Cook, Apple’s CEO, defended company policies and claimed the company is paying every dollar it owes in taxes.

“Apple complies fully with both the laws and spirit of the laws. And Apple pays all its required taxes, both in this country and abroad,” Cook claims in a prepared statement that was released on the night of May 20th and read into the record on the 21st.

“In my view A.O.I. does not reduce U.S. taxes at all,” Cook added in response to a series of questions from Levin.

Also, Cook noted that “from a practical point of view” A.O.I, A.O.E. and A.S.I. are functionally managed and controlled in the United States, the Apple executives said.

“We have significant employees in Ireland of about 4,000. So there’s significant amount of discussions and leadership and negotiations that go on in Ireland. But most of the strategic ones do take place in the United States,” Cook explained in his testimony.

Yet, Levin claims that two-thirds of Apple’s profits are in Irish companies.

“That’s because of the way we set ourselves up 30 years ago,” Peter Oppenheimer, Apple’s chief financial officer, responded.

“The only reason you’re not bringing them home is because they were transferred to these three Irish companies,” Levin said. “That’s the reason why they’re there. It’s your decision not to bring those profits home, so now $100 billion plus is stashed away in those three Irish companies that you control but is nonetheless in their legal name. The question is, will you bring them home?”

Will Apple return the profits back to the United States?

“I have no current plan to bring them back at the current tax rate,” Cook testified.

Also, in response to another question, Cook said he wants to see the U.S. government update the federal tax code – which he says would lead to more jobs and investment.




Edited by Blaise McNamee

TechZone360 Contributor

SHARE THIS ARTICLE
Related Articles

Coding and Invention Made Fun

By: Special Guest    10/12/2018

SAM is a series of kits that integrates hardware and software with the Internet. Combining wireless building blocks composed of sensors and actors con…

Read More

Facebook Marketplace Now Leverages AI

By: Paula Bernier    10/3/2018

Artificial intelligence is changing the way businesses interact with customers. Facebook's announcement this week is just another example of how this …

Read More

Oct. 17 Webinar to Address Apache Spark Benefits, Tools

By: Paula Bernier    10/2/2018

In the upcoming webinar "Apache Spark: The New Enterprise Backbone for ETL, Batch and Real-time Streaming," industry experts will offer details on clo…

Read More

It's Black and White: Cybercriminals Are Spending 10x More Than Enterprises to Control, Disrupt and Steal

By: Cynthia S. Artin    9/26/2018

In a stunning new report by Carbon Black, "Hacking, Escalating Attacks and The Role of Threat Hunting" the company revealed that 92% of UK companies s…

Read More

6 Challenges of 5G, and the 9 Pillars of Assurance Strategy

By: Special Guest    9/17/2018

To make 5G possible, everything will change. The 5G network will involve new antennas and chipsets, new architectures, new KPIs, new vendors, cloud di…

Read More