May 15 (Bloomberg) -- Apple Inc. will be the subject of a May 21 Senate hearing on U.S. companies’ offshore tax practices, said two people familiar with the inquiry.
Apple Chief Executive Officer Tim Cook will testify at the hearing of the Permanent Subcommittee on Investigations, one of the people said.
The committee has been examining companies that use various maneuvers to reduce their tax bills, including Microsoft Corp. and Hewlett-Packard Co. Apple, based in Cupertino, California, has $40.4 billion in earnings outside the U.S. on which it hasn’t paid U.S. taxes. If Apple brought that money back to the U.S., the company would owe $13.8 billion, according to public filings by the company.
“We’ve been working with the subcommittee to answer their questions about Apple, and we welcome any further questions they might have,” Apple said in a statement. “Apple is one of the largest taxpayers in the United States, having paid $6 billion in federal corporate income tax in fiscal 2012.”
Apple is borrowing money to return cash to shareholders rather than repatriate offshore earnings. The use of debt to fund the dividend and stock buyback program saved the company $9.2 billion in taxes, according to Moody’s Investment Services.
Gordon Trowbridge, a spokesman for Senator Carl Levin, a Michigan Democrat who is chairman of the committee holding the hearing, said the witness list will be released May 17.
Politico earlier reported plans for the hearing.
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