A major strategy that Apple utilized to avoid paying taxes was to divided the legal and economic sectors of its intellectual property rights and have them be sent to different subsidiaries where it would be most advantageous for tax purposes according to Senator McCain.
Apple kept the legal property rights in the United States where it could utilize the Federal court system to defend its property. But the economic segment was sent to Ireland, where it would pay the special negotiated rate of 2%. 95% of Apple’s research takes place in the U.S. while less the 1% takes place in Ireland.
McCain took a direct shot at Apple saying they were giving a new meaning to Apple’s old slogan of “Think Different.”