Paradise Papers: Apple's secret tax bolthole revealed

Violet Tucker
November 8, 2017

Panorama's Paradise Papers reporting team alleges Apple subsidiaries holding its untaxed offshore cash were shifted to Jersey in the Channel Islands.

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

The 13 million documents that make up the so-called Paradise Papers were leaked - some say hacked - from specialist law firm Appleby, which has an office on Jersey.

The European Union instructed Apple a year ago to pay upto $14.5 billion as sanction of illegal taxes benefits in the Ireland.

Apple moved the tax home of two Irish subsidiaries to Jersey, a self-governing island in the English Channel between Britain and France, and also made Ireland the tax home of a different European subsidiary. It's believed that one of those companies holds the majority of Apple's massive stash of cash on hand, which is up to $268.9 billion according to the company's most recent quarterly earnings 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". Some of the tech giants had allegedly paid corporate tax rates as low as Apple's 0.00045 percent, versus nearly 29 percent for US non-tech firms.

Apple shifted two of its subsidiaries from Ireland to the island of Jersey in an apparent effort to shield assets from European tax regulators, according to leaked documents from a Bermuda law firm that were reported by the New York Times.

But Apple has come under fire both in the United States and the European Union for its tax practices.

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Apple and Nike used offshore entities to legally minimise their global tax bill, documents show.

Apple came under pressure in 2013 in the US Senate, when CEO Tim Cook was forced to defend its tax system.

The Paradise Papers disclosures come as President Trump's administration seeks to overhaul the USA federal tax code. The latest figures indicate that since Apple's reorganisation of its Irish companies this sum has increased 84%, though Apple will not confirm which of its foreign subsidiaries own this cash.

There is an ongoing legal battle between the Irish government, Apple and the European Union to claw back more money off the tech company.

The Center for Investigative Reporting's Michael Montgomery explains how tax havens and shell corporations operate to protect the wealthy elite and the significance of the Paradise Papers.

"As the largest taxpayer in the world, we've paid over $35 billion in corporate income taxes over the past three years - plus billions of dollars more in property tax, payroll tax, sales tax, and VAT", said Apple.

World champion Lewis Hamilton has found himself at the centre of an worldwide tax avoidance scandal.

Other reports by Guamnewswatch

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