Apple's CEO Tim Cook will be answering questions about Apple's tax practices in front of the US Senate tomorrow and he plans to pitch his own ideas aimed at "simplifying" US tax laws.
Cook will be questioned as part of the Senate Permanent Subcommitte's investigation.
According to a Washington Post report, Cook plans to propose a "dramatic simplification" of corporate tax laws in the United States.
Cook told The Washington Post that he plans to present specific proposals that will encourage companies to bring back foreign earnings to the US and invest that money in job creation, as well as research and development.
"If you look at it today, to repatriate cash to the US, you need to pay 35% of that cash. And that is a very high number", Cook said.
"We are not proposing that it be zero. I know many of our peers believe that. But I don’t view that. But I think it has to be reasonable…"
Cook claims that Apple may actually already be one of the "largest corporate taxpayers in the US". He told The Washington Post: "When you combine state and federal, Apple is paying approximately $1 million an hour in just domestic income taxes."
Under tax fire
Apple has been under fire for its tax practices. Last year a New York Times report claimed that Apple uses offices in states other than California, where it’s headquartered, and countries outside the US to help minimize its overall tax burden.
The report pointed to Apple’s subsidiaries in Luxembourg, Ireland and the British Virgin Islands, and claimed that some are "some little more than a letterbox or an anonymous office - that help cut the taxes it pays around the world."
"Apple was a pioneer of an accounting technique known as the 'Double Irish With a Dutch Sandwich,' which reduces taxes by routing profits through Irish subsidiaries and the Netherlands and then to the Caribbean," claimed the report, a practice that it claims is now imitated by a number of companies.
Apple isn’t the only company being investigated in the US for its tax avoiding behaviour. Microsoft and HP have already testified.
Nor is it only America that is criticising Apple's tax practices. Back in February, the British, French and German governments launched a joint initiative to crack down on tax avoidance and stop big firms that "country-hop to pay less tax".
Google guilty of "tax avoidance"
A report in The Sunday Times this weekend claimed that Google is guilty of "massive tax avoidance", cheating British taxpayers out of hundreds of millions of pounds over the past decade.
A whistle blower who worked for Google between 2002 and 2006 told the Sunday Times that "Although Google’s London sales staff would negotiate and sign contracts with British customers, and cash was paid into a UK bank account, deals were technically booked through its Dublin office to minimise its liabilities here."
More than 1,000 U.S. companies hold an estimated $1.7 trillion in earnings overseas, according to a JPMorgan report.