'Paradise Papers' Out Apple for Tax Shelter in Jersey Isle

08 November, 2017, 01:11 | Author: Lester Mason
  • After a Tax Crackdown, Apple Found a New Shelter for Its Profits

Apple moved the operation that holds most of its offshore cash out of Ireland to the Channel Island following a tax crackdown in the Republic. Both were moved to Jersey, according to revelations in the Panama papers.

It is claimed that the companies were set up in Jersey after Apple "shopped around" for a new jurisdiction following the closure of a tax loophole in Ireland which the firm exploited until 2013.

"US multinational firms are the global grandmasters of tax avoidance schemes that deplete not just USA tax collection but the tax collection of most every large economy in the world", former corporate tax adviser Edward Kleinbard was quoted as saying by the NYT.

The NYT and the International Consortium of Investigative Journalists cited confidential records that were obtained by the German newspaper Suddeutsche Zeitung and shared.

"Since then Apple has paid billions of dollars in US tax on the investment income of this subsidiary", it added.

But the iPhone maker still won't say how much profit it makes through its Irish companies - making it impossible to gauge whether $1.5bn is a lot of tax to pay in three years or not.

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Margrethe Vestager, the European Commissioner for Competition, said she was in touch with Apple about the company's controversial tax structures - revealed in the so-called Paradise Papers this week - before the media published them.

Paradise Papers documents show Apple's two key Irish subsidiaries, Apple Operations International (AOI), believed to hold most of Apple's $252bn overseas cash hoard, and Apple Sales International (ASI), were managed in Jersey from the start of 2015 until early 2016.

Although there is no suggestion that Apple did anything illegal, the revelations will once again cast the spotlight on the tax affairs of the world's most profitable company.

Ireland's approach to Apple's tax payments has been under scrutiny by the European Commission since 2014, and the state was ordered a year ago to reclaim €13bn in illegal tax benefits from the company. "We don't stash money on some Caribbean island".

It said: "A coordinated legislative effort internationally will remove the current tug of war between countries over tax payments and ensure certainty of law for taxpayers". That maneuver lets the companies avoid paying hefty taxes they could face by bringing the cash back to the US.

It alleges that Apple lawyers sent a questionnaire to the offshore finance firm Appleby, seeking to discover what tax havens like the British Virgin Islands, Bermuda, the Cayman Islands, Mauritius, the Isle of Man, Jersey and Guernsey could do for Apple. The company didn't immediately respond to requests for further comment on its global tax arrangements. "We've paid over $35bn in corporate income taxes over the past three years, plus billions of dollars more in property tax, payroll tax, sales tax and Vat", it said. In 2014, Apple paid a tax rate of 0.005 percent.

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