Apple 'moved offshore funds to Jersey' after Ireland tax crackdown

Apple 'moved offshore funds to Jersey' after Ireland tax crackdown

Apple 'moved offshore funds to Jersey' after Ireland tax crackdown

The move from Apple came after the company's shelter in Ireland began to be less reliable.

Until 2014, Apple channelled sales outside of America through Irish companies, which kept taxes low. "In fact, our payments to Ireland increased significantly and over three years [2014, 2015 and 2016] we've paid $1.5bn in tax there - 7% of all corporate income taxes paid in that country".

"The move affected two of its most important subsidiaries, one of which is thought to hold the key to a company cash pile worth more than $250 billion", The Guardian reported, based on records shared by the International Consortium of Investigative Journalists (ICIJ).

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.

Instead of paying Irish corporation tax of 12.5%, or the USA rate of 35%, Apple's avoidance structure helped it reduce its tax rate on profits outside of the U.S. to the extent that its foreign tax payments rarely amounted to more than 5% of its foreign profits, and in some years dipped below 2%. The company has resisted bringing the money back to the USA because of the massive tax bill it would face.

Margrethe Vestager, the European Commissioner for Competition, said she was in touch with Apple about the company's controversial tax structures - revealed in the so-called Paradise Papers this week - before the media published them.

The majority of the leaked Paradise Papers come from Appleby, which specialises in offshore accounts.

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Apple settled on Jersey, which had a tax rate of zero for foreign companies. "We don't stash money on some Caribbean island".

By the start of 2015, Apple had restructured its affairs in Ireland, including securing tax residency in Jersey for Apple Sales International and Apple Operations International, two of the three Irish shadow companies highlighted in the US Senate investigation a year earlier. "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".

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

In a statement, Apple said that it paid "every dollar it owes in every country around the world" and said changes to its corporate structure in 2015 were to preserve tax payments in the United States rather than lower them elsewhere. The company didn't immediately respond to requests for further comment on its worldwide tax arrangements.

Apple and Ireland are now appealing the ruling. In 2014, Apple paid a tax rate of 0.005 percent.

It alleges that Apple lawyers sent a questionnaire to the offshore finance firm Appleby, seeking to discover what tax havens like the British Virgin Islands, Bermuda, the Cayman Islands, Mauritius, the Isle of Man, Jersey and Guernsey could do for Apple.

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