Apple settled on Jersey for new tax shelter after Irish rule change

Apple settled on Jersey for new tax shelter after Irish rule change

Reports yesterday from a new release of documents from the "Paradise Papers" stated that Apple settled on Jersey as its tax refuge.

The news outlet and the nonprofit investigative organization cited confidential records that were obtained by the German newspaper Suddeutsche Zeitung and shared.

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

Specifically, to avoid paying $9 billion in USA corporate taxes in 2012, Apple allegedly used a strategy that involved rapid transfers of cash between three offshore units with no tax "residence".

Apple moved the tax home of two Irish subsidiaries to Jersey, a self-governing island in the English Channel between Britain and France, and also made Ireland the tax home of a different European subsidiary.

Apple has come under fire for tax avoidance in the past, including drawing the ire of a bipartisan United States Senate committee that accused the company of seeking "the holy grail of tax avoidance".

Until 2013 Apple had funneled earnings from outside of the Americas through Ireland, which enabled the company to pay as little as 2% in corporation tax. If an Irish company spent $15 billion on such rights it could claim a $1 billion tax deduction annually for 15 years.

But by setting up a perfectly legal zero percent corporate tax rate structure in the Isle of Jersey, a BBC analysis found that with Apple making $44.7 billion in 2017 foreign profits outside the US, the company only paid $1.65 billion, or 4 percent, in foreign taxes.

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Apple CEO Tim Cook slammed the ruling as "total political crap" and argued that there's "no reason for it in fact or in law".

In August previous year, the European Commission concluded that Ireland gave Apple "illegal tax benefits" and levied the firm with an £11.6 billion in back taxes. "We don't depend on tax gimmicks", he went on.

Mr Cook responded defiantly: "We pay all the taxes we owe, every single dollar".

Instead of paying Irish corporation tax of 12.5%, or the USA rate of 35%, its foreign tax payments rarely amounted to more than 5 % of its foreign profits - and dipped below 2% in some years.

Lewis Hamilton, quadruple world champion of Formula One, resorted to a ghost society based on the Isle of Man to save more than 4 million euros in the VAT (taxes) for the purchase of a private jet of more than 18 million euros.

The services of the Queen of England and the Secretary of Commerce of the United States, Wilbur Ross, among other personalities are also mentioned.

Apple enlisted the Bermuda-based law firm Appleby to help it restructure its offshore tax scheme.

Apple said it complies with laws and supports comprehensive worldwide tax reform and a simpler tax system.

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