After a Tax Crackdown, Apple Found a New Shelter for Its Profits
Posted in: Government & Policy at 07/11/2017 21:01
The tech giant has found a tax haven in the island of Jersey, leaving billions of dollars untouched by the United States, leaked documents reveal.
Tim Cook was angry.
It was May 2013, and Mr. Cook, the chief executive of Apple, appeared before a United States Senate investigative subcommittee. After a lengthy inquiry, the committee found that the company had avoided tens of billions of dollars in taxes by shifting profits into Irish subsidiaries that the panel’s chairman called “ghost companies.”
“We pay all the taxes we owe, every single dollar,” Mr. Cook declared at the hearing. “We don’t depend on tax gimmicks,” he went on. “We don’t stash money on some Caribbean island.”
True enough. The island Apple would soon rely on was in the English Channel.
Five months after Mr. Cook’s testimony, Irish officials began to crack down on the tax structure Apple had exploited. So the iPhone maker went hunting for another place to park its profits, newly leaked records show. With help from law firms that specialize in offshore tax shelters, the company canvassed multiple jurisdictions before settling on the small island of Jersey, which typically does not tax corporate income.
Apple secretly moved parts of empire to Jersey after row over tax affairs
Apple reacted to widespread criticism of its tax affairs by secretly shifting key parts of its empire to Jersey as part of a complex rearrangement that has allowed it to keep an ultra-low tax rate, according to an analysis of Paradise Papers documents.
The move affected two of its most important subsidiaries, one of which is thought to hold the key to a company cash pile worth more than $250bn (£190bn).