After tax crackdown, Apple found new shelter for profit


An investigation by the European Commission concluded the rate of tax for one of Apple's Irish companies for one year had been just 0.005%.

The Panorama documentary featured BBC reporter Richard Bilton doorstepping Appleby's Jersey office on the Esplanade, where staff denied that the U.S. tech giant had any presence.

An Apple spokesman said the company hadn't engaged in any wrongdoing.

"U.S. multinational firms are the global grandmasters of tax avoidance schemes that deplete not just US tax collection but the tax collection of most every large economy in the world", said Edward Kleinbard, a former corporate tax adviser to such companies, now a law professor at the University of Southern California. The lawmakers have also proposed another break, permitting multinationals to bring home more than $2.6 trillion stowed offshore at sharply reduced tax rates.

'If this proves to be such business, we will consider how to strengthen our arrangements, if necessary by amending our legislation to introduce a substance test.

Does the news about Apple's alleged tax activities surprise you?

Apple moved the operation that holds most of its offshore cash out of Ireland to the Channel Island following a tax crackdown in the Republic.

A new report from the International Consortium of Investigative Journalists and its media partners says Apple sought out a new location to store its overseas cash to avoid paying higher taxes.

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In advance of its move to Jersey, Apple retained a Bermuda-based law firm called Appleby to provide advice on where to move its offshore tax shelter.

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

"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", the company said in a statement.

The head of the world's biggest technology company faced a grilling in Washington over what politicians there claimed were "gimmicks" used to get around USA tax laws.

Several months later, due to global pressure, Irish authorities started to crack down on the scheme, forcing Apple to start looking for a new tax haven.

Tax strategies like the ones used by Apple - as well as Amazon, Google, Starbucks and others - cost governments around the world as much as $240 billion a year in lost revenue, according to a 2015 estimate by the Organization for Economic Cooperation and Development.

A law professor who reviewed the documents told the newspaper that there was a "strong possibility" that Apple moved intellectual property to Ireland in a transfer worth almost $200 billion. Alongside the obvious - a low corporate tax rate - discretion for the company trying to minimise its tax bill is important.