Jersey Tax Haven: Apple Used Channel Island To Avoid US Taxes

Paradise Papers Who are the biggest names in tax haven leak


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. 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".

The documents shared with some media outlets by the USA -based International Consortium of Investigative Journalists has exposed tactics the wealthy and powerful have used to avoid taxes.

"We strongly support efforts from the global community toward comprehensive worldwide tax reform and a far simpler system".

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 selective treatment allowed Apple to pay an effective corporate tax rate of 1 percent on European profits in 2003, according to the commission previous year.

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.

Apple has defended its tax arrangements after reports revealed it had shifted its mountain of offshore cash from Ireland to a tax haven in the English Channel.

The Papers are just a few of the hundreds of thousands leaked from offshore law firm Appleby, which recently warned its super-rich clients of a data breach in September previous year, reminiscent of the data breach in 2015 on Panamanian law firm Mossack Fonseca. "We do not stash money on some Caribbean island".

The European Commission has said Apple should pay €13 billion, plus interest, to Ireland, on untaxed income earned by Irish-incorporated Apple subsidiaries that were for a period of years stateless for tax purposes. "A coordinated legislative effort internationally will remove the current tug of war between countries over tax payments and ensure certainty of law for taxpayers".

The European Union is now trying to force Ireland to collect €13 billion ($15 billion) in unpaid taxes from Apple.

Despite being invited to do so, the corporation did not respond to speculation that Apple Operations Europe, which is now tax-resident in Ireland, may have spent tens of billions of euro, and possibly well in excess of €100 billion, on intellectual property which it brought from Apple subsidiaries now based in zero-taxed Jersey.

Speaking before a Senate investigative subcommittee in May 2013, Apple's CEO Tim Cook pledged, "We pay all the taxes we owe, every single dollar", adding that the company did not need any "tax gimmicks". The company reports its effective global tax rate at 24.6 percent.

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.

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