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Apple defends US corporate tax arrangements

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Apple has defended its tax payment arrangements in the US, ahead of a Congressional report that is expected to be highly critical of the iPhone maker's corporate finance structure.

In a statement, Apple said that it paid "an enormous amount of taxes" in the US on a local, state and federal basis.

"In fiscal 2012 we paid $6bn (£3.73bn) in federal corporate incomes taxes, which is one out of every $40 in corporate income taxes collected by the US government," it said.

Apple headquarters

© PA Images / Paul Sakuma/AP

Apple logo

© PA Images / Thibault Camus/AP



The statement comes ahead of the publishing of a report from a year-long Senate Permanent Subcommittee on Investigations inquiry into the tax practices of some of America's leading firms, including Microsoft, Hewlett-Packard and Google.

Last year, The New York Times said that Apple had become the central focus of the inquiry, and also accused the firm of using offshore subsidiaries in Ireland, The Netherlands, and the Caribbean to reduce its corporate tax bill.

The paper said that despite the fact that most of Apple's core operations are based in the US, its accountants "have found legal ways to allocate about 70% of the company's profits overseas, where tax rates are often much lower, according to corporate filings".

This also comes at a time of increasing scrutiny over the tax practices of technology firms, including the recent grilling of representatives of Amazon and Google by UK MPs.

Google is understood to have paid £6m in tax for 2011 on sales of £395 million, while Amazon was revealed to have paid no UK corporation tax at all in 2011, despite generating sales of £3.3bn in that year.

> Google, Amazon 'insulting' UK with tax strategy, MPs say
> Apple paid only 2% corporation tax outside the US

During the US inquiry, it was claimed that Apple had deferred taxes on at least $35bn (£29bn) of offshore income during just two years.

In its statement, Apple insisted that it was "one of the top corporate income taxpayers in the country, if not the largest".

The company claimed that it "conducted all of its business with the highest of ethical standards, complying with applicable laws and accounting rules".

However, speaking to The New York Times, former Treasury Department economist Martin Sullivan said: "Apple went out of its way to try and ensure that its tax savings didn't attract too much public attention.

"Because tax avoidance of that magnitude - even though it's legal and permissible - isn't in keeping with the image of a socially progressive company."

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