January 24, 2018

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Apple relocated overseas cash to Jersey tax haven, leaked docs reveal

08 November 2017

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.

As Apple came under pressure in the USA and Europe about what was called the "double Irish" scheme, it enlisted offshore finance law firm Appleby to find a new place to stash cash out of the reach of tax collectors, reports said.

The paper said Apple has $US128 billion ($A179 billion) in offshore profits not taxed by the US.

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.

The new tax haven enabled Apple to "sidestep" a crackdown on an Irish tax loophole it had previously been exploiting, according to the report. For instance, the company said its 2015 corporate reorganization was "specially created to preserve its tax payments to the United States, not to reduce its taxes anywhere else".

It said it remains the world's largest taxpayer, paying about $35bn (£26bn) in corporation tax over the past three years, that it had followed the law and its changes "did not reduce our tax payments in any country". Both were moved to Jersey, according to revelations in the Panama papers.

Up until 2014, the tech company had been exploiting a loophole in tax laws in the U.S. and the Republic of Ireland known as the "double Irish".

With help from lawyers including Applebys, Apple reportedly started channelling its profits through the offshore tax haven of Jersey after Ireland started to clamp down on the amount of tax Apple was paying there.

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

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

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".

Apple claims that the company pays an "effective tax rate on foreign earnings" of 21 percent, despite the fact that European Union was trying to make Apple pay about $15 billion in disputed back taxes associated with double-Irish-flips.

In Budget 2014, following months when the Government here faced repeated attacks over a low corporation tax rate and its popularity with global brands such as Apple, Facebook and Google, the Government moved to rebuild its reputation overseas. Instead they would be taxed by the country where the money is made.

Apple relocated overseas cash to Jersey tax haven, leaked docs reveal