Just one day before Apple's CEO Tim Cook is expected to argue for corporate tax reform on Capitol Hill, a new report claims that the company is avoiding paying taxes on billions of dollars in profits.
The U.S.-based software giant is parking $102 billion in overseas tax havens, allowing the company to pay a near zero global tax rate on that money, according to a new report from the left-leaning think tank, Citizens for Tax Justice.
On Tuesday, Cook is expected to testify on behalf of Apple as part of a Senate committee hearing targeting companies that move money overseas in an aim to lower their tax bills. Cook told the Washington Post last week that he plans to ask Congress to lower the corporate tax rate on overseas profits companies bring back home. Large U.S.-based multinational companies currently have $1.9 trillion stashed offshore.
Apple will tell the Senate that it doesn't use "gimmicks" to avoid paying taxes, like moving intellectual property to tax havens, according to a tweet from Reuters.
Apple's 10-K filed with the Securities and Exchange Commission indicates that the company would pay a U.S. tax rate of 34.5 percent if it brought its offshore profits back to the U.S., CTJ found. Because the U.S. tax code gives companies credit for paying taxes abroad, this 34.5 percent figure is proof that Apple is not paying very much in taxes to other countries, according to CTJ.
Apple didn’t immediately respond to The Huffington Post's voicemail and email messages.
Apple in one of a number of companies that have argued that the current tax system disincentivizes corporations from bringing their profits back to the U.S. and investing them here. In 2004, Congress tested offering companies a tax holiday on offshore profits they bring back to the U.S., but the experiment did little to create jobs, according to a Treasury Department analysis.
Keeping the current tax system in place, which allows companies to defer taxes on offshore profits, would cost the U.S. $590 billion over the next 10 years, Damon Silvers, policy director and special counsel at the AFL-CIO, told reporters on a press call Monday.
“That single item is practically as large as the total amount President Obama has asked that the congress agree to in revenue increases,” Silvers said on the call.
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