EU's Vestager seeking details on Apple's recent tax set-up

08 November, 2017, 01:11 | Author: Franklin Nunez
  • After a Tax Crackdown, Apple Found a New Shelter for Its Profits

That then led Apple lawyers to look at six offshore tax havens that might allow an Irish subsidiary to "conduct management activities without being subject to taxation in these jurisdictions", according to the "Paradise Papers".

Apple would thus appear to have switched tax shelter strategies from the Caribbean "Double-Irish-Flip" to a "Jersey Isle".

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.

The NYT and the International Consortium of Investigative Journalists cited confidential records that were obtained by the German newspaper Suddeutsche Zeitung and shared.

Several months later, due to global pressure, Irish authorities started to crack down on the scheme, forcing Apple to start looking for a new tax haven.

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But the iPhone maker still won't say how much profit it makes through its Irish companies - making it impossible to gauge whether $1.5bn is a lot of tax to pay in three years or not.

It's worth noting that Apple's decision to move its subsidiaries isn't illegal and doesn't break any laws, but it does raise questions over the company's business practices as it continues to dodge taxes despite being one of the most profitable companies in the world.

After the USA 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 organizations reported based on the once-secret cache of documents known as the Paradise Papers.

Paradise Papers documents also show details of offshore deals involving Queen Elizabeth II, the USA commerce secretary, a fundraiser for Canada's prime minister and others.

Apple said the new structure had not lowered its taxes. "We do not stash money on some Caribbean island".

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It said: "A coordinated legislative effort internationally will remove the current tug of war between countries over tax payments and ensure certainty of law for taxpayers".

"Additional tax is then also due in the USA when the earnings are repatriated", the statement said.

Apple's 2017 accounts showed it made $44.7bn outside the U.S. and paid $1.65bn in taxes to foreign governments, a rate of about 3.7%.

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". "We've paid over $35bn in corporate income taxes over the past three years, plus billions of dollars more in property tax, payroll tax, sales tax and Vat", it said.

In recent years, American high-tech company Apple has been avoiding taxes by shifting parts of the company's operations to Jersey Island in the English Channel, after its previous tax haven, Ireland, tightened regulations, the so-called Paradise Papers have revealed.

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