APPLE TAX AVOIDANCE PLAN LAID BARE
Tech giant insists it pays fair share of dues after leaked reports show it shifted wealth to tiny British dependency
APPLE shifted much of its offshore wealth from Ireland to a tax haven in the British Isles, according a review of leaked Paradise Papers documents on Monday.
Apple confirmed the move in an online post, saying it served to “ensure that tax obligations and payments to the United States were not reduced”.
After the technology colossus stated publicly in 2013 that it was paying its proper share of taxes, it moved the bulk of its untaxed overseas cash to Jersey, a British dependency in the Channel Islands, various media organisations reported based on the once-secret cache of documents known as the Paradise Papers.
The documents shared with media by the International Consortium of Investigative Journalists has exposed tactics the wealthy and powerful have used to avoid taxes.
In its lengthy post, Apple said it moved profits to Jersey while making corporate changes to adapt to Irish tax laws tightening in 2015.
“Apple’s subsidiary, which holds overseas cash, became resident in the United Kingdom Crown dependency of Jersey, to ensure that tax obligations and payments to the US were not reduced,” said Apple.
Since then, all of Apple’s Irish operations have been conducted through Irish resident companies, paying a statutory 12.5 per cent tax, according to the California-based technology titan.
“Since then, Apple has paid billions of dollars in US tax on the investment income of this subsidiary,” it said.
“There was no tax benefit for Apple from this change and, importantly, this did not reduce Apple’s tax payments or tax liability in any country.”
Apple’s lengthy written response did not specifically address what taxes, if any, were paid on the original profits channelled to Jersey. The world’s most valuable company noted that it had earmarked US$36 billion (RM152.17 billion) to cover deferred US taxes.
Prior to 2014, Apple had taken advantage of tax rules to route overseas revenue through Irish subsidiaries to minimise taxes.
As Apple came under pressure in the US and Europe about what was called the “double Irish” scheme, it enlisted offshore finance law firm Appleby to find a new place to stash cash out of the reach of tax collectors.
Apple settled on Jersey, which had a tax rate of zero for foreign companies. Emails cited in reports indicated Apple wanted the arrangement kept secret.
In its post, Apple insisted it was the world’s biggest taxpayer, paying more than US$35 billion in corporate income taxes during the past three years, plus billions more in taxes on property, payrolls, sales and value-added tax.
“The debate over Apple’s taxes is not about how much we owe but where we owe it,” said Apple. “Under the current international tax system, profits are taxed based on where the value is created.” AFP