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Apple defends its tax affairs

Apple defends its tax affairs
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Declaring “We are pride to be an American company and equally proud of our contributions to the US economy”, Chief Executive Tim Cook came out fighting before the American Senate Permanent Subcommittee on Investigations.

Apple has been accused of avoiding US tax.

But Mr Cook told the committee there was an answer – an overhaul of the whole tax system.

“This reform should be revenue neutral, eliminate all corporate tax expenditures, lower corporate income tax rates and implement a reasonable tax on foreign earnings that allows the free flow of capital back to the United States”.

Offshore tax avoidance by multinational companies has become a high-profile issue, but Subcommittee staffers made it clear Apple is not breaking any laws and is co-operating fully with the inquiry.

The company has paid just 1.9 percent tax on its non-US profits, largely by exploiting a loophole in Ireland’s tax code.

Apple has issued a statement saying it does not use ‘tax gimmicks’ and having foreign subsidiaries does not reduce its US tax bill.