Apple defends role of Irish operation ahead of US tax hearing

Monday 20 May 2013 22.26
Apple says it now employs nearly 4,000 people in its Irish operations
Apple says it now employs nearly 4,000 people in its Irish operations

Apple has defended the way it manages its tax affairs, including the role played by its Irish operations, ahead of its CEO’s appearance at a US Senate hearing.

In its testimony to the US Permanent Subcommittee on Investigations, the company said that its Irish-based subsidiaries "play an important role" in its international operations.

It said that its Irish business is "not a shell company" and, on the contrary, now employs nearly 4,000 people.

Apple has been criticised for not paying taxes in the US on its international earnings, while the company is also holding more than $100bn (€78bn) in cash outside of its native country.

However, in its detailed filing, Apple said it was already one of the largest corporate income tax payers in the US, claiming to have paid nearly $6bn to the US Treasury last year.

"Apple has substantial foreign cash because it sells the majority of its products outside the US", the statement says, arguing that 61% of its revenue comes from non-US sources.

The company says it uses its foreign cash holdings to "support its overseas operations in the best interest of its shareholders" and repatriating these funds to the US would see them reduced by 35%.

The company's main international subsidiary, Apple Operations International, is one of many it established in Ireland in 1980.

Originally manufacturing-focused, its Irish base is now largely centred on customer service, sales and technical and financial support.

A year ago it announced plans to create 500 new jobs in its European headquarters in Co Cork by the end of 2013, while it was also set to expand its campus there.

According to the Apple statement ahead of its US hearing, the company has a cost-sharing arrangement with two of its Irish subsidiaries to "share the costs and risks" of its US-based research and development arm, which sees operations here jointly-finance research in return for a licence to distribute the resulting products.