Paradise Papers: Apple’s Secret Tax Bolthole Revealed

(BBC)- Paradise Papers: The world’s most profitable firm has a secretive new structure that would enable it to continue avoiding billions in taxes, the Paradise Papers show.

They reveal how Apple sidestepped a 2013 crackdown on its controversial Irish tax practices by actively shopping around for a tax haven.

It then moved the firm holding most of its untaxed offshore cash, now $252bn, to the Channel Island of Jersey.

Apple said the new structure had not lowered its taxes.

It said it remained 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”.

In a further statement the company stressed that no operations or investments had been moved from Ireland.

The Paradise Papers is the name for a huge leak of financial documents that is throwing light on the world of offshore finance.

Up until 2014, the tech company had been exploiting a loophole in tax laws in the US and the Republic of Ireland known as the “double Irish”.

This allowed Apple to funnel all its sales outside of the Americas – currently about 55% of its revenue – through Irish subsidiaries that were effectively stateless for taxation purposes, and so incurred hardly any tax.

Instead of paying Irish corporation tax of 12.5%, or the US rate of 35%, Apple’s avoidance structure helped it reduce its tax rate on profits outside of the US to the extent that its foreign tax payments rarely amounted to more than 5% of its foreign profits, and in some years dipped below 2%.

The European Commission calculated the rate of tax for one of Apple’s Irish companies for one year had been just 0.005%.

Apple came under pressure in 2013 in the US Senate, when CEO Tim Cook was forced to defend its tax system.

Angry that the US was missing out on a huge amount of tax, then-Senator Carl Levin told him: “You shifted that golden goose to Ireland. You shifted it to three companies that do not pay taxes in Ireland. These are the crown jewels of Apple Inc. Folks, it’s not right.”

Mr Cook responded defiantly: “We pay all the taxes we owe, every single dollar. We do not depend on tax gimmicks… We do not stash money on some Caribbean island.”

Apple’s questionnaire

After the EU announced in 2013 that it was investigating Apple’s Irish arrangement, the Irish government decided that firms incorporated there could no longer be stateless for tax purposes.

In order to keep its tax rates low, Apple needed to find an offshore financial centre that would serve as the tax residency for its Irish subsidiaries.

In March 2014, Apple’s legal advisers sent a questionnaire to Appleby, a leading offshore finance law firm and source of much of the Paradise Papers leak.

It asked what benefits different offshore jurisdictions – the British Virgin Islands, Bermuda, the Cayman Islands, Mauritius, the Isle of Man, Jersey and Guernsey – could offer Apple.

The document asked key questions such as was it possible to “obtain an official assurance of tax exemption” and could it be confirmed that an Irish company might “conduct management activities… without being subject to taxation in your jurisdiction”.

They also asked whether a change of government was likely, what information would be visible to the public and how easy it would be to exit the jurisdiction.

Please send us your Feedback, News Item, Photos and/or Videos to our WhatsApp Number 1-876-353-1389 or Email [email protected]

Recently Published

Schoolgirl, 12, who shaved her head to raise money for a cancer charity is left in tears after cruel bullies call her 'ugly'

Schoolgirl, 12, who shaved her head to raise money for a cancer charity is left in tears after cruel bullies call her ‘ugly’

A 12-year-old schoolgirl was mocked for shaving her head in honour of her grandmother, a cancer survivor. Kyarah Doyle, from New South Wales, took part in the Leukemia Foundation World’s Greatest Shave on Thursday. The Inverell High School student raised more than $1000 for the charity by shaving off her long brown hair. But despite her […]

Barrington Levy Sister
Tank-1-670x450

CEO says PCDF has Accomplished Mission

Jamaica News: Chief Executive Officer (CEO) at the PetroCaribe Development Fund (PCDF), Dr. Wesley Hughes, says the PCDF has accomplished its mission, and will be integrated into the Ministry of Finance and the Public Service as of March 31, 2019. Speaking at a JIS ‘Think Tank’ on March 15, Dr. Hughes said that all assets […]

RAF-3-1-670x450

Country Embarks on Next Phase of Economic Reforms

Jamaica News: Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, says the country is now embarking on the next phase of economic reforms, which will ensure that monetary policy delivers low, stable and predictable inflation. This strategy, referred to as “inflation targeting”, is a monetary policy regime in which a central […]

JAMPRO-670x450

JAMPRO Leads Cosmetics Manufacturers to Trade Show in New Orleans

Jamaica News: The Jamaica Promotions Corporation (JAMPRO) will be leading a team of local cosmetics manufacturers to participate in the Bronner Brothers International Beauty Show in New Orleans, United States, from March 30 to April 1. The annual beauty show, which is one of the largest of its kind in North America, attracts more than […]

DSC4335-670x450

Maritime Authority to Push for Blue Economy Legislation

Jamaica News: Director General of the Maritime Authority of Jamaica (MAJ), Rear Admiral (Ret’d) Peter Brady, says the agency will be pushing for legislation governing exploration and development of a sustainable blue economy. The blue economy refers to the utilisation of the resources of the ocean for economic benefits, while ensuring the sustainability and productivity […]