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No benefits reaped from transfer of wealth: Apple on new tax haven leak

The US-based technology major has reportedly moved a bulk of its untaxed overseas cash to Jersey

AFP | PTI  |  San Francisco 

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shifted much of its from to a haven in the British Isles, according to a review of leaked Paradise Papers documents. confirmed the move in an online post, saying it served to "ensure that obligations and payments to the US were not reduced." After the US technology colossus stated publicly in 2013 that it was paying its proper share of taxes, it moved the bulk of its untaxed overseas cash to Jersey, a British dependency in the Channel Islands, various media organisations reported based on the once-secret cache of documents known as the Paradise Papers. The documents shared with some media outlets by the US-based Consortium of Investigative Journalists has exposed tactics the wealthy and powerful have used to avoid taxes. In its lengthy post, said it moved profits to Jersey while making corporate changes to adapt to Irish laws tightening in 2015. "Apple's subsidiary, which holds overseas cash, became resident in the UK Crown dependency of Jersey, specifically to ensure that obligations and payments to the US were not reduced," said. Since then, all of Apple's Irish operations have been conducted through Irish resident companies, paying a statutory 12.5 per cent tax, according to the California-based technology titan. "Since then, has paid billions of dollars in US on the investment income of this subsidiary," said. "There was no benefit for from this change and, importantly, this did not reduce Apple's payments or liability in any country." Apple's lengthy written response did not specifically address what taxes, if any, were paid on the original profits channelled to Jersey. The world's most valuable company noted that it has earmarked $36 billion to cover deferred US taxes. Prior to 2014, had taken advantage of rules to route overseas revenue through Irish subsidiaries to minimise taxes. As came under pressure in the US and Europe about what was called the "double Irish" scheme, it enlisted offshore finance law firm to find a new place to stash cash out of the reach of collectors, reports said. settled on Jersey, which had a rate of zero for foreign Emails cited in reports indicated wanted the arrangement kept secret. In its post, insisted it is the world's biggest taxpayer, paying more than $35 billion in corporate income taxes during the past three years, plus billions more in taxes on property, payrolls, sales and value-added tax, or VAT. "The debate over Apple's taxes is not about how much we owe but where we owe it," said. "Under the current system, profits are taxed based on where the value is created." maintained that the "vast majority of the value in our products is indisputably created in the United States," the home to design, development engineering and more for the company. said that its effective global rate is 24.6 per cent. The company currently faces an EU demand for some $14.5 billion in taxes based on a ruling that its structure in amounted to illegal state aid. was cited as the source of much of the leaked financial data that has resulted in searing revelations in recent days. said that reforming the system to make it simpler is "essential" and needed to "remove the current tug of war between countries over payments." "We understand that some would like to change the system so multinationals' taxes are spread differently across the countries where they operate, and we know that reasonable people can have different views about how this should work in the future," said. "At we follow the laws, and if the system changes, we will comply." Paradise Papers documents also show details of offshore deals involving Queen Elizabeth II, the US commerce secretary, a fundraiser for Canada's prime minister and others.

First Published: Tue, November 07 2017. 14:43 IST
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