Apple pays a fair share of the taxes it owes the U.S. and other nations, its CEO said Tuesday, despite criticism from U.S. senators that the company is ducking taxes by shifting profits to subsidiaries that the company does not consider tax residents of any nation.
Apple CEO Tim Cook defended the company Tuesday before a Senate subcommittee, saying that Apple uses no "tax gimmicks" in assigning about two-thirds of its worldwide profits to three subsidiaries in Ireland, where the company has negotiated a corporate income tax rate of less than 2 percent.
In reality, Apple has paid a far lower rate than the 2 percent negotiated in Ireland, with one subsidiary paying no income taxes in the past five years, and another paying 0.05 percent in Ireland in 2011, according to a report released Monday by the investigations subcommittee of the Senate Homeland Security and Governmental Affairs Committee.
But Cook and two other Apple executives defended their tax decisions before the subcommittee. Apple paid an effective tax rate of 30.5 percent in the U.S. last year and may be the single largest corporate taxpayer in the U.S., Cook said. The company employs 50,000 people in the U.S. and its products support hundreds of thousands of U.S. jobs, he said.