Apple moved two of its subsidiaries from Ireland to Jersey in order to minimise its tax liabilities following the EU-led crackdown on low-tax Ireland, according to the latest releases from the so-called 'Paradise Papers'.
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 last year, reminiscent of the data breach in 2015 on Panamanian law firm Mossack Fonseca.
The documents, obtained by German newspaper Süddeutsche Zeitung, were reviewed by the International Consortium of Investigative Journalists (ICIJ), along with a number of publications, including the New York Times and the Guardian.
They reveal that Apple was actively seeking a tax haven in 2014 after European officials began to crack down on the so-called "double Irish" tax structure that enabled Apple to save billions of dollars in taxes around the world. The European Commission (EC) calculated the rate of tax for one of Apple's Irish companies for one year had been just 0.005 per cent.
The firm's top lawyers are said to have approached Appleby, asking them to fill out a questionnaire highlighting the advantages of moving to various offshore jurisdictions.
In a letter from the lawyers on 20 March 2014, Appleby was asked "to provide assistance with and coordination of a multi-jurisdictional project involving the British Virgin Islands (BVI), Cayman, Guernsey, Isle of Man and Jersey … If your proposal is cost-effective then we will ask you to handle the entire project."
Apple is said to have settled on Jersey, a self-governed territory that offers an enticing zero per cent corporate tax rate for foreign companies. The move is said to have enabled Apple to amass as much as $252bn (£191bn) of cash offshore.
The Paradise Papers documents show that Apple's two key Irish subsidiaries, Apple Operations International (AOI) and Apple Sales International (ASI) were managed with the assistance of Appleby's office in Jersey from the start of 2015 until early 2016.
Apple on Monday responded to the claims, suggesting that the move was part of its corporate restructuring to comply with Ireland's rules and to ensure that "tax obligations and payments to the US were not reduced".
It continued: "The debate over Apple's taxes is not about how much we owe, but where we owe it. 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.
"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."
Last year, the European Commission ordered Ireland to collect back taxes of up to $14.5bn from Apple, having previously ruled that the firm's tax deals in the country constitute "illegal state aid".
In October, the EC announced it would be taking Ireland to court over the delay, with Competition Commissioner Margrethe Vestager saying at the time: "More than one year after the commission adopted this decision, Ireland has still not recovered the money...
"We, of course, understand that recovery in certain cases may be more complex than in others, and we are always ready to assist. But member states need to make sufficient progress to restore competition."
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".
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