A new report is claiming that Apple is avoiding paying taxes on billions of dollars in offshore profits.
According to Citizens for Tax Justice (CTJ), Apple Inc. has paid a near zero global tax rate on its $102 billion worth of overseas earnings.
On Tuesday, Apple CEO Tim Cook is to testify on behalf of the software giant as part of a Senate hearing directed on companies that put their money abroad hoping to lower their tax bills. Cook said in an interview last week that he is planning to ask Congress to lower the corporate tax rate on overseas profits that multinational companies bring back to the US. Large US-based multinational companies currently have $1.9 trillion in profits abroad.
Apple’s Form 10-K, a yearly company performance report filed with the Securities and Exchange Commission (SEC), states that the company has to pay a tax rate of 34.5 percent if the offshore profits were brought back to the US. However, because the US tax code allows companies to pay taxes abroad, CTJ believes this is proof that Apple is not paying that much tax in other countries.
Apple is one of several companies that say the current tax system discourages corporations from bringing their profits back to the US. According to a Treasury Department analysis, Congress tested giving companies a tax holiday on offshore profits brought back to the US in 2004, but the test did little to create jobs.