Yahoo Finance Paradise Papers: Apple moved offshore tax haven to Jersey after Ireland crackdown
Tech giant Apple picked Jersey as its new tax haven base to enable it to continue to avoid billions in taxes, the Paradise Papers show.
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.
Until 2014, Apple had been exploiting loopholes – known as “double Irish” – which allowed it to push all its sales outside of the US through Irish subsidiaries that ran up little or no tax.
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Instead of paying Irish corporation tax of 12.5%, or the US rate of 35%, its foreign tax payments rarely amounted to more than 5 % of its foreign profits – and dipped below 2% in some years.
An investigation by the European Commission concluded the rate of tax for one of Apple’s Irish companies for one year had been just 0.005%.
There is an ongoing legal battle between the Irish government, Apple and the EU to claw back more money off the tech company.
After the 2013 intervention by Europe, Dublin decided that firms incorporated there could no longer be stateless for tax purposes.
That prompted Apple to seek an alternative and, according to the BBC investigation of the Paradise Papers, the company identified Jersey – a UK Crown dependency that makes its own tax laws and has a zero per cent corporate tax rate for foreign companies.
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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.
The 13 million documents that make up the so-called Paradise Papers were leaked – some say hacked – from specialist law firm Appleby, which has an office on Jersey.
For its part, Apple insists the new structure has not lowered its taxes.
It said it remains the world’s largest taxpayer, paying about $35bn (£26bn) in corporation tax over the past three years, that it had followed the law and its changes “did not reduce our tax payments in any country”.
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Apple’s 2017 accounts showed it made $44.7bn outside the US and paid $1.65bn in taxes to foreign governments, a rate of about 3.7%. That is less than a sixth of the average rate of corporation tax in the world.
In a lengthy statement on its website, Apple says it pays “every dollar it owes in every country around the world”, adding: “We believe every company has a responsibility to pay the taxes they owe and we’re proud of the economic contributions we make to the countries and communities where we do business.”
