Politico reports today that it has learned Apple CEO Tim Cook is expected to testify at a Senate hearing next week related to an investigation into the offshore tax practices of the company:
Apple has been under fire for its tax practices. The company recently avoided paying as much as $9.2 billion in taxes by buying back stock with debt instead of offshore cash, Bloomberg reported. Apple has a reported $100 billion in offshore funds.
The hearing is part of the panel’s continued examination of how companies shift profits offshore and how that impacts the tax code. Representatives from Microsoft and Hewlett-Packard testified in September 2012 in a hearing on the same topic.
Apple spokesperson Steve Dowling provided Politico with the following statement:
“Apple is one of the largest taxpayers in the United States, having paid $6 billion in federal corporate income tax in fiscal 2012,” Dowling said in a statement. “We also help create hundreds of thousands of jobs in the U.S. by keeping our R&D in California and creating category-defining products like the iPhone, iPad and the app store, which has generated billions of dollars in sales for software developers.”
Apple’s offshore tax strategy has been the subject of controversy several times in the past and in November of last year Australia hit Apple with a $28.5 million bill in back taxes over its questionable use of tax havens.
Last year The New York Times profiled how Apple uses tax havens, such as Nevada, Ireland, and Luxembourg, to sidestep taxes in both the United States and Europe. The U.K. isn’t the only country putting pressure on technology multinationals over tax avoidance schemes, the French government also requested $252 million USD in back taxes from Amazon, a company that also uses Luxembourg as a tax haven for its Europe operations, back in November.
Earlier this month Moody’s Investment Services estimated Apple saved around $9.2B in its massive stock buy-back and dividend plan by borrowing instead of dipping into the over $100 billion in cash it keeps offshore. Apple would have ended up paying a 35 percent tax to repatriate the money.