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

Lucy Hill
November 8, 2017

The European Union ordered Ireland in 2016 to collect $14.5 billion in back taxes from Apple, saying that the country granted it illegal tax breaks. The move is said to have enabled Apple to amass as much as $252bn (£191bn) of cash offshore.

"When Ireland changed its tax laws in 2015, Apple made changes to its corporate structure to comply".

Apple paid nearly no tax on earnings of more than $100bn over four years, US Senator Carl Levin and former presidential candidate John McCain claimed, although Apple mounted a strong defence.

German newspaper Süddeutsche Zeitung received the documents and shared them with ICIJ and its media partners, including The New York Times, Australia's ABC, the BBC in the United Kingdom, Le Monde in France and CBC in Canada.

Apple said it believes comprehensive worldwide tax reform is essential, and that it has for many years been advocating for simplification of the tax code.

The company is the largest private employer in Cork and economists estimate Apple's operations in Ireland generate around $24 billion annually in salaries, taxes and investment. The company has resisted bringing the money back to the USA because of the massive tax bill it would face.

The Apple spokesman said the company paid $1.5 billion in Irish tax between 2014 and 2017 in the context of the then imminent release of the Paradise Papers, which have revealed that Apple responded to the closure of the Irish tax loophole by having two of its Irish subsidiaries take up tax residency in the offshore island of Jersey.

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The Paradise Papers disclosures come as President Trump's administration seeks to overhaul the US federal tax code.

Apple said the new structure had not lowered its taxes. "A coordinated legislative effort internationally will remove the current tug of war between countries over tax payments and ensure certainty of law for taxpayers".

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

"I have been asking for an update on the arrangement made by Apple, the recent way they have been organised, in order to get the feeling whether or not this is in accordance with our European rules but that remains to be seen", Vestager told journalists at the Web Summit tech conference in Lisbon, according to Reuters. We do not depend on tax gimmicks.

In advance of its move to Jersey, Apple retained a Bermuda-based law firm called Appleby to provide advice on where to move its offshore tax shelter.

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". In 2014, Apple paid a tax rate of 0.005 percent.

Other reports by TheDailyFarc

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