The Apple chief executive is likely to be asked to justify why his company reports a 25.2 per cent tax rate, yet pays 15 per cent to the US authorities and then sets aside additional cash for possible future tax liabilities.
The complex tax planning, commonplace in large companies, has allowed Apple to avoid criticism levelled at Google and Amazon over their tax affairs.
Mr Cook has insisted Apple does not funnel profits abroad. The iPhone-maker has $102.3billion in cash outside the US.
To pay a dividend, Apple is borrowing $17billion at home rather than risk huge tax bills, which could be up to $9billion, by bringing its foreign money into the USA.
The Apple chief executive is likely to use his appearance to call for a “dramatic simplification” of America’s tax laws, in a move that could have a dramatic effect on the valuations of UK companies.
Mr Cook will lobby for a change in the rules which mean that companies bringing tax back to the US from overseas have to pay 35pc tax on that money.
He is expected to petition Senators for a reduction in the levy when he is due be grilled by about the way Apple has moved profits overseas.
Mr Cook told the Washington Post: “If you look at it today, to repatriate cash to the US, you need to pay 35pc of that cash. And that is a very high number. We are not proposing that it be zero. I know many of our peers believe that … But I think it has to be reasonable.”
American companies like Oracle have previously called for the repatriation tax to be reduced or scrapped altogether. Such a move would have an impact on companies around the world.
Many US companies currently use their overseas cash to buy up businesses overseas, to help them avoid a massive tax bill, inflating valuations across the board.
The repatriation tax is thought to have been a factor in Microsoftﾒs $8.5bn purchase of Skype, which is based in Luxembourg, and Hewlett-Packardﾒs $11.1bn swoop on the British software firm, Autonomy.
The row in Washington comes as major US companies including Google and Amazon face a grilling by MPs over the amount of tax they pay in Britain.
The Public Accounts Committee is questioning the companies over the way they use loopholes to pay paltry amounts of corporation tax, despite racking up billions of dollars worth of sales in the country.
telegraph.co.uk
The complex tax planning, commonplace in large companies, has allowed Apple to avoid criticism levelled at Google and Amazon over their tax affairs.
Mr Cook has insisted Apple does not funnel profits abroad. The iPhone-maker has $102.3billion in cash outside the US.
To pay a dividend, Apple is borrowing $17billion at home rather than risk huge tax bills, which could be up to $9billion, by bringing its foreign money into the USA.
The Apple chief executive is likely to use his appearance to call for a “dramatic simplification” of America’s tax laws, in a move that could have a dramatic effect on the valuations of UK companies.
Mr Cook will lobby for a change in the rules which mean that companies bringing tax back to the US from overseas have to pay 35pc tax on that money.
He is expected to petition Senators for a reduction in the levy when he is due be grilled by about the way Apple has moved profits overseas.
Mr Cook told the Washington Post: “If you look at it today, to repatriate cash to the US, you need to pay 35pc of that cash. And that is a very high number. We are not proposing that it be zero. I know many of our peers believe that … But I think it has to be reasonable.”
American companies like Oracle have previously called for the repatriation tax to be reduced or scrapped altogether. Such a move would have an impact on companies around the world.
Many US companies currently use their overseas cash to buy up businesses overseas, to help them avoid a massive tax bill, inflating valuations across the board.
The repatriation tax is thought to have been a factor in Microsoftﾒs $8.5bn purchase of Skype, which is based in Luxembourg, and Hewlett-Packardﾒs $11.1bn swoop on the British software firm, Autonomy.
The row in Washington comes as major US companies including Google and Amazon face a grilling by MPs over the amount of tax they pay in Britain.
The Public Accounts Committee is questioning the companies over the way they use loopholes to pay paltry amounts of corporation tax, despite racking up billions of dollars worth of sales in the country.
telegraph.co.uk
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