Update: Live coverage of the Senate hearing on Apple’s offshore tax practices is above.

As things heat up in the row on alleged tax avoidance by Apple, Ireland has denied a claim made by the Senate Permanent Subcommittee on Investigations that it had agreed a special deal with the company to allow it to pay corporation tax of just 2% on its Irish earnings.

The denial was made to Yahoo! Finance reporter Conor Humphries:

According to the congressional report, Ireland had also agreed a special 2 percent rate for Apple’s Irish taxable profits instead of the normal 12.5 percent, but a spokesman for Ireland’s finance department, when asked how and why this had come about, said: “Ireland’s tax system is statute based, so there is no possibility of individual special tax rate deals for companies.”

This appears to flatly contradict a statement by the Senate subcommittee that accused Apple of …

Negotiating a tax rate of less than 2 percent with the government of Ireland – significantly lower than that nation’s 12% statutory rate

Apple yesterday published its testimony to the committee, which states:

Apple does not use tax gimmicks. Apple does not move its intellectual property into
offshore tax havens and use it to sell products back into the US in order to avoid US tax; it does not use revolving loans from foreign subsidiaries to fund its domestic operations; it does not hold money on a Caribbean island; and it does not have a bank account in the Cayman Islands.

There is no direct reference to the 2% claim in Apple’s testimony, but it will almost certainly be addressed when Tim Cook appears before the subcommittee later today. C-SPAN is covering the hearing live - which is now underway.