They reveal how Apple sidestepped a 2013 crackdown on its controversial Irish tax practices by actively shopping around for a tax haven.
It then moved the firm holding most of its untaxed offshore cash, now $252bn, to the Channel Island of Jersey.
Apple said the new structure had not lowered its taxes.
It said it remained the world’s largest taxpayer, paying about $35bn (£26bn) in corporation tax over the past three years, that it had followed the law and its changes “did not reduce our tax payments in any country”.
Up until 2014, the tech company had been exploiting a loophole in tax laws in the US and the Republic of Ireland known as the “double Irish”.
This allowed Apple to funnel all its sales outside of the Americas – currently about 55% of its revenue – through Irish subsidiaries that were effectively stateless for taxation purposes, and so incurred hardly any tax.
Instead of paying Irish corporation tax of 12.5%, or the US rate of 35%, Apple’s avoidance structure helped it reduce its tax rate on profits outside of the US to the extent that its foreign tax payments rarely amounted to more than 5% of its foreign profits, and in some years dipped below 2%.
The European Commission calculated the rate of tax for one of Apple’s Irish companies for one year had been just 0.005%.
Apple came under pressure in 2013 in the US Senate, when CEO Tim Cook was forced to defend its tax system.
Angry that the US was missing out on a huge amount of tax, then-Senator Carl Levin told him: “You shifted that golden goose to Ireland. You shifted it to three companies that do not pay taxes in Ireland. These are the crown jewels of Apple Inc. Folks, it’s not right.”
Mr Cook responded defiantly: “We pay all the taxes we owe, every single dollar. We do not depend on tax gimmicks… We do not stash money on some Caribbean island.”
Personally, I don’t blame apple for doing what they are doing, it is obvious. If I was part of Apple I would want and do the same thing, pay little in taxes using loopholes, then offshore the rest
for more information on this, refer to the following article
http://www.bbc.com/news/world-us-canada-41889787
This is an intresting post. From a capitlaist perspective, I agree that it makes sense for Apple to offshore in order to avoid paying high taxes and maximize revenue. According to the article, the European Commission discovered that Ireland gave an illegal tax benefit to Apple. Do you guys think that there are any unintentional consquences behind this act?