THE Irish Government has denied claims it set up a special tax rate deal for Apple that enabled it to pay little or nothing on billions of dollars in profits.

Deputy Prime Minister Eamon Gilmore refused to take the blame over the growing scandal after the US Senate said the arrangement had been in place with the computer firm over profits stashed in Irish subsidiaries.

It said in a report that a subsidiary with a mailing address in Cork received $29.9 billion (£19.7bn) in dividends from lower-tiered offshore affiliates from 2009 to 2012, comprising 30% of Apple's global net profits.

It said it exploited a difference between Irish and US tax residency rules.

Chief executive Tim Cook told senators Apple paid all the taxes it owed and had complied with both the spirit and the legality of the laws. He said last year it paid $6bn (£3.95bn) to the US Treasury, a tax rate of about 30%.

The Irish Government said its system was transparent and other countries were responsible if the tax rate paid by Apple was too low.

"They are issues that arise from the taxation systems in other jurisdictions, and that is an issue that has to be addressed first of all in those jurisdictions," said Mr Gilmore.

In a 40-page memorandum released ahead of an appearance by Mr Cook yesterday, a Senate subcommittee identified three subsidiaries that have no tax residency either in Ireland, where they are incorporated, or in the US, where those companies are managed.

The main subsidiary, a holding company that includes Apple's retail stores throughout Europe, has not paid any corporate income tax in the last five years.

Apple's arrangement has allowed it to pay just 1.9% tax on its $37bn in overseas profits in 2012, despite the fact the average tax rate in the countries of the Organisation for Economic Co-operation and Development, its main markets, was 24% in 2012.