The U.S. Senate sharply questioned the CEO of Apple Inc., the world's most valuable company, over allegations that its Irish subsidiaries help it avoid billions in taxes, and Tim Cook declared, “We pay all the taxes we owe _ every single dollar.”

The Senate Permanent Subcommittee on Investigations released a report Monday that held up Apple as an example of the legal tax avoidance made possible for companies by the U.S. tax code. It estimates that Apple avoided at least $3.5 billion in U.S. federal taxes in 2011 and $9 billion in 2012 by using its tax strategy and described a complex setup involving Irish subsidiaries.

Even if additional tens of billions from Apple began flowing into the U.S. Treasury, the money would barely put a dent in the $642 billion federal budget deficit. But Apple as a symbol resonates with politicians seeking to make the case that a powerful corporation shouldn't be excused from its fair share of taxes.

The subcommittee also has examined the tax strategies of Microsoft Corp., Hewlett-Packard Co. and other multinational companies, finding that they too have avoided billions in U.S. taxes by shifting profits offshore and exploiting weak, ambiguous sections of the tax code.

The spotlight on Apple comes at a time of heated debate over whether and how to raise revenues to help reduce the high U.S. deficit. Many Democrats say the government is missing out on billions of dollars because companies are stashing profits abroad and avoiding taxes. Republicans want to cut the corporate tax rate of 35 percent and ease the tax burden on money that U.S. companies make abroad. They say the move would encourage companies to invest at home.

Cook reaffirmed Apple's position that given the current U.S. tax rate, it has no intention of bringing that cash back to the U.S. Like other companies, it has a responsibility to shareholders to pay as little as possible in taxes. Cook added that Apple is the nation's largest corporate taxpayer.

Thanks largely to the iPhone, Apple is also one of the world's most profitable companies. It earned $41.7 billion in calendar year 2012. It's neck and neck with Exxon Mobil Corp. as the world's most valuable company.

Apple's enormous profits mean that it has more cash stashed overseas than any other company: $102 billion.

Sen. Carl Levin, the panel's chairman, said Apple's use of loopholes in the U.S. tax code is unique among multinational corporations.

Apple uses five companies located in Ireland to carry out its tax strategy, according to the report. The companies are located at the same address and share members of their boards of directors. While all five companies were incorporated in Ireland, only two of them also have tax residency in that country. That means the other three aren't legally required to pay taxes in Ireland because they aren't managed or controlled in that country, in Apple's view.

The report says Apple capitalizes on a difference between U.S. and Irish rules regarding tax residency. In Ireland, a company must be managed and controlled in the country to be a tax resident. Under U.S. law, a company is a tax resident of the country in which it was established. Therefore, the Apple companies aren't tax residents of Ireland or the U.S., in Apple's view.

“Apple is exploiting an absurdity,” Levin said.

Cook argued that the Irish subsidiaries don't reduce the company's U.S. taxes. Rather, the company avoids paying the 35 percent federal tax rate on profits made overseas by not bringing those profits back to the U.S., a practice it shares with other multinationals.

The U.S. tax code contains provisions designed to force companies that sell their products overseas to pay U.S. taxes on the profits from those sales. But certain loopholes allow companies to legally bypass those provisions. The Irish subsidiaries are set up to take advantage of those loopholes, according to the committee's report.

Apple's stock fell $3.27, or less than one percent, to close at $439.66 in Tuesday's trading.

Levin also called Ireland a “tax haven,” an appellation Irish Prime Minister Enda Kenny rejected when speaking in parliament in Dublin on Tuesday. He also denied the assertion in the subcommittee's report that Apple had negotiated an Irish corporate tax rate of less than 2 percent. All companies pay the standard rate of 12.5 percent on profits from Irish operations, the prime minister said.