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

09 November, 2017, 01:43 | Author: Salvatore Jensen
  • Paradise Papers India ranks 19 out of the 180 countries represented in the data in terms of the number of names

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".

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.

The cache of 13 million secret documents came from Appleby, a Bermuda-based law firm that helps businesses and wealthy individuals find tax shelters.

At a 2013 congressional hearing, Apple chief Tim Cook denied the use of "gimmicks" to avoid taxes.

It has been discovered that Apple made changes to where their operations were run from and have now chosen Jersey.

The BBC and the Guardian say Apple sent the Jersey company a questionnaire concerning matters including the public visibility of its records, the possibility of special arrangements with the government and how stable such deals would likely be for each potential location. 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".

The European Union instructed Apple previous year to pay upto $14.5 billion as sanction of illegal taxes benefits in the Ireland. "In fact, our payments to Ireland increased significantly and over the past three years we've paid $1.5bn in tax there - 7% of all corporate income taxes paid in that country", said an Apple statement. That allowed the Isle of Jersey to cut its corporate tax rate to zero percent a decade ago.




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". "At Apple we follow the laws, and if the system changes we will comply".

According to the August 2016 decision issued by the EU, Apple met with the European Commission in 2015 to explain its new corporate structure as well as submitting a summary with the key elements as a follow-up. "We're proud of the economic contributions we make to the countries and communities where we do business", it said in a lengthy statement.

Apple's actions were not illegal and the companies have since moved out of Jersey.

After the European Union announced in 2013 that it was investigating Apple's Irish arrangement, the Irish government decided that firms incorporated there could no longer be stateless for tax purposes.

It was May 2013, and Apple CEO Cook appeared before a Senate investigative subcommittee.

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

The company said it "pays every dollar it owes in every country around the world", including tax in the U.S.at the standard rate of 35% and an effective rate of 21% on foreign earnings.

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