Senators say Apple Inc. receives special, extra-low corporate rate
WASHINGTON – Ireland’s ambassador to the U.S. declared Friday that his nation was not a tax haven for Apple Inc., formally disputing a congressional report that said company executives had negotiated a special low rate to shelter much of their foreign earnings.
“The tax rates attributed to Ireland are wrong and misleading,” the ambassador, Michael Collins, wrote to Sens. Carl Levin, D-Mich., and John McCain, R-Ariz., of the Senate’s Permanent Subcommittee on Investigations in a letter released Friday.
Collins said that Ireland’s 12.5 percent tax on corporate trading income is set in law “so there is no possibility of individual special tax rates being negotiated for companies.”
Irish officials have been pushing back against the tax-haven label since the subcommittee released a report last week that said Apple “negotiated a special corporate tax rate of less than 2 percent” with Ireland for three company subsidiaries located there.
Responding to the subcommittee, Apple wrote that Ireland “has calculated Apple’s taxable income in such a way as to produce an effective rate in the single digits.” Since 2003, that rate has been less than 2 percent.
Apple Chief Executive Officer Tim Cook also appeared to confirm that rate during the hearing. Asked if the company had negotiated a 2 percent rate, Cook did not say that was incorrect.
He said that as part of recruiting the company to locate there in 1980, “the Irish government did give us a tax incentive agreement.”
Because of that low rate, the subcommittee staff said, Apple was able to avoid paying at least $15 billion in U.S. taxes on $44 billion in foreign income from 2009 to 2012.