Apple shifts its billions to a new haven in Jersey
APPLE was last night accused of secretly shifting key parts of its empire to Jersey to keep its tax rate low.
the technology giant allegedly shopped around for a new offshore base for its billions following criticism of its tax affairs in Ireland.
According to the BBC – which has been leaked details as part of the Paradise Papers cache – Apple moved a subsidiary holding vast amounts of untaxed offshore cash to the Channel Islands.
Although it has done nothing illegal, the disclosure is likely to raise fresh questions over the tax arrangements of the world’s most profitable firm.
Until 2014, the US tech firm had been exploiting legal loopholes to funnel all its sales outside of America – about 55 per cent of its revenue – through Irish subsidiaries. these were effectively stateless for taxation purposes, and so incurred hardly any tax.
But after the EU announced in 2013 that it was investigating the arrangement, the Irish government decided that firms incorporated there could no longer be stateless for tax purposes. In 2014, emails from Apple’s legal advisers to the law firm at the centre of the Paradise Papers leak, Appleby, enquired about possible destinations for its cash – and if such a move could become ‘publicly visible’.
the firm also asked if there was a ‘credible opposition party or movement’ that could move to upgrade lax tax laws, while considering using destinations like Ber- muda, the Cayman Islands, Mauritius and the Isle of Man.
to emphasise the level of confidentiality, one email between senior partners at Appleby read: ‘For those of you who are not aware, Apple are extremely sensitive concerning publicity. they also expect the work that is being done for them only to be discussed amongst personnel who need to know.’ Apple ultimately chose to relocate the companies controlling most of its cash to Jersey – where corporation tax rate for foreign firms is zero.
the Paradise Papers apparently show that Apple operations International (AOI) and Apple Sales International (ASI), were managed from Appleby’s office in Jersey from early 2015 for a year, allowing Apple to continue avoiding billions in tax.
Crucially, when Ireland changed its tax law it allowed companies incorporated there before the end of 2014 to continue being run from tax havens until 2020.
Apple said the new structure had not lowered its taxes and that it remained the world’s largest taxpayer – paying about £26billion in corporation tax over the past three years. tim Cook, Apple’s CEO, said in 2013 that the firm pays ‘all the taxes we owe’ and ‘does not stash money on some Caribbean island’.
the company said in a statement last night: ‘When Ireland changed its tax laws in 2015, we complied by changing the residency of our Irish subsidiaries and we informed Ireland, the European Commission and the United States.
‘the changes we made did not reduce our tax payments in any country.’
‘Sensitive about publicity’