European Union asks for more details of Apple's tax affairs

08 November, 2017, 09:35 | Author: Lora Ball
  • Apple 'set up a secret structure in Jersey to avoid paying billions of pounds in tax'

Beyond tax cases, Brussels has also fined Google for allegedly abusing its dominance in search, Facebook for providing misleading information in its acquisition of messaging service WhatsApp and Amazon over its ebooks practices.

Apple's hunt for a tax haven is a familiar tale, said Reuven Avi-Yonah, director of the worldwide tax program at the University of Michigan Law School, who also reviewed the Appleby documents.

Panorama's Paradise Papers reporting team alleges Apple subsidiaries holding its untaxed offshore cash were shifted to Jersey in the Channel Islands. The island charges no tax on companies' profits, ICIJ reported.

Since, the most important thing to be noticed is that Jersey usually doesn't tax companies.

Apple is now facing an European Union demand for some $14.5 billion in taxes based on a ruling that its tax structure in Ireland amounted to illegal state aid.

The Papers are just a few of the hundreds of thousands leaked from offshore law firm Appleby, which recently warned its super-rich clients of a data breach in September past year, reminiscent of the data breach in 2015 on Panamanian law firm Mossack Fonseca.

CNET is unable to verify whether the documents are real or have been altered.

Apple did not reply to an AFP request for comment but has previously gone on record saying it pays all taxes required by law and that the amount is substantial.

More news: No. 24 Michigan State upsets No. 7 Penn State

It said reports inaccurately state that it is avoiding tax in the US.

As Apple came under pressure in the U.S. and Europe about what was called the "double Irish" scheme it enlisted offshore finance law firm, Appleby, to find a new place to stash cash out of reach of tax collectors, according to reporting. We do not depend on tax gimmicks. President Trump has said USA businesses are getting a bad deal under current rules.

Leaked documents have revealed how Apple went shopping around for a tax haven in 2014.

"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 loophole had allowed countries to incorporate in Ireland but declare profits in other low-tax or tax-free jurisdictions, meaning they could in theory pay no corporation tax at all. That is less than a sixth of the average rate of corporation tax in the world.

IT giant Apple reacted to global accusations of tax avoidance by secretly shifting key parts of its overseas subsidiaries to Jersey, according to an analysis of the leaked Paradise Papers documents.

"The company appeared to be on the lookout for a country in which nothing at all would get in the way of business", said Süddeutsche Zeitung.

Baker McKenzie emailed several questionnaires to Appleby offices in notable offshore tax havens, including the Cayman Islands, the British Virgin Islands, Bermuda, Isle of Man, Guernsey and Jersey.

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