Apple defends its tax affairs Declaring "We are pride to be an American company and equally proud of our contributions to the US economy," Chief Executive Tim Cook came out fighting to the American Senate Permanent Subcommittee on Investigations. Apple has been accused of avoiding US tax. But Mr Cook told the committee there was an an answer - and proposed an overhaul of the whole tax system. This reform should be revenue neutral, eliminate all corporate tax expenditures, lower corporate income tax rates and implement a reasonable tax on foreign earnings that allows the free flow of capital back to the United States. Offshore tax avoidance by multinational companies has become a high-profile issue, but Subcommittee staffers made it clear Apple is not breaking any laws and is co-operating fully with the inquiry. The company paid just 1.9 per cent tax on its non-American profits of 28 billion Euros. Apple has issued a statement saying it does not use "tax gimmicks" and having foreign subsidiaries does not reduce its American tax bill. More about: Apple, Tax fraud, Taxes, USA