The complex arrangement includes three subsidiaries, based ostensibly in Ireland, which appear not to be designated as tax resident anywhere, the committee said. A source on the committee called them "iCompanies – I for imaginary, invisible". He didn’t say if they used the fashionable rounded rectangle. However one senator as "the epitome" of tax-avoidance schemes, allowed Apple to pay only very small amounts of tax on much of its overseas profits, thanks to the Irish companies that exist "nowhere" for tax purposes.
Senator Carl Levin, the subcommittee's Democratic chairman said that Apple wasn't satisfied with shifting its profits to a low-tax offshore tax haven. It had to become the game changer of tax avoidance.
“It has created offshore entities holding tens of billions of dollars, while claiming to be tax resident nowhere. We intend to highlight that gimmick and other Apple offshore tax avoidance tactics so that American working families who pay their share of taxes understand how offshore tax loopholes raise their tax burden, add to the federal deficit and ought to be closed," he moaned.
Tim Cook, the CEO of Apple, will answer the accusations at a hearing convened by the bipartisan permanent subcommittee on investigation in Washington on Tuesday. Apple vehemently denied the charges ahead of the meeting.