Investors have recently called on Apple to add more parental controls to its devices to help in limiting things such as use time for young children. Following the company’s announcement that it would add more “robust” controls in a future update, Tim Cook has addressed the topic in an interview…
A trove of 13.4 million papers detailing the tax havens and financial dealings of the world’s wealthiest corporations, powerful politicians, and other public figures was leaked earlier this week to German newspaper Süddeutsche Zeitung, which in turn, shared it with the International Consortium of Investigative Journalists.
Already, households names including Nike, Uber, Facebook, and even Bono have been implicated.
The Paradise Papers, as the project is called, have also cast unwanted attention on Apple, the world’s most profitable company, and its tax schemes. They reveal that the iPhone maker has a shell company based in the Channel Island of Jersey, where it holds the vast portion of its untaxed $ 252 billion hoard.
The untaxed cash pile came to reside in that particular island, which does not tax corporate profits, in the aftermath of a grueling 2013 US Senate inquiry into the tax structure of Apple’s Irish subsidiaries.
“We pay all the taxes we owe, every single dollar,” Apple CEO Cook fumed at the hearing. “We don’t depend on tax gimmicks…We don’t stash money on some Caribbean island.”
Apple had in fact been stashing its overseas revenue in Ireland, where it was protected by an intricate tax structure that rendered it effectively stateless and subject to annual tax rates that sometimes dipped below 2 percent– and far below Ireland’s 12.5 percent corporate tax rate and the US’s rate of 35 percent. That came to an end after the senate investigation, which resulted in a crackdown by Irish officials on Apple’s Irish subsidiaries.
The Paradise Papers detail how Apple, in response, quietly hired the services of Appleby, an offshore tax law firm, to make other arrangements. In a leaked questionnaire, Apple officials asked Appleby to find an island where it could “obtain an official assurance of tax exemption” and “conduct management activities… without being subject to taxation in [its] jurisdiction”.
They also sought assurance that the political climate was stable and that the tax code would not change.
A leaked email shows that Appleby partners were instructed to keep the move a secret: “For those of you who are not aware, Apple [officials] are extremely sensitive concerning publicity. They also expect the work that is being done for them only to be discussed amongst personnel who need to know”, one senior Appleby partner wrote.
The firms eventually opted to arrange for two of Apple’s Irish subsidiaries– Apple Operations International (AOI) and Apple Sales International (ASI)– to be managed from Appleby’s office in Jersey starting in 2015. The BBC reports that AOI is rumored to hold the majority of Apple’s $ 252 billion overseas cash pile.
Apple declined to comment on the movement of its two subsidiaries and released the following statement: “When Ireland changed its tax laws in 2015, we complied by changing the residency of our Irish subsidiaries and we informed Ireland, the European Commission and the United States. The changes we made did not reduce our tax payments in any country. In fact, our payments to Ireland increased significantly and over the last three years we’ve paid $ 1.5bn in tax there.”
In its press statement, MacBook-maker also emphasized that none of its Irish operations and investments had been moved. It noted that as the world’s largest taxpayer, it pays taxes in every country where it sells Apple products including “billions of dollars in taxes to the US at the statutory 35 percent rate on investment income from its overseas cash.” Over the past three years, Apple has paid $ 35 billion in corporate taxes.
That being said, Cook also has been firm in his stance that much of Apple’s untaxed overseas profits would not be repatriated until the US corporate tax rate is lowered significantly– which may come to pass under the current Republican administration.
Overall, the Paradise Papers shed light on how the world’s largest multinational companies regularly retain the services of law firms to legally minimize their tax bills. As such, Appleby declared following an investigation that “there is no evidence of any wrongdoing, either on the part of ourselves or our clients”. “We are a law firm which advises clients on legitimate and lawful ways to conduct their business. We do not tolerate illegal behaviour” the law firm advised on its website.
The European Union’s competition commissioner has asked Apple to update details on its tax situation, following allegations that the company relocated some operations from Ireland to Jersey to avoid higher rates.
AppleInsider – Frontpage News
If you haven’t heard, the Paradise Papers is a leak similar to the Panama Papers leak of last year, one that would expose celebrities and business executives who were (reportedly) moving large amounts of money overseas in order to avoid paying taxes. The Paradise Papers is a collection of several million documents relating to offshore investments totaling $ 10 trillion involving 120,000 businesses and individuals dating from 1950 to 2016. Since the documents release on Sunday, multiple reports have directly accused Apple of partaking in the use of tax havens overseas, specifically in…