After the EU announced in 2013 that it was investigating Apple’s Irish arrangement, the Irish government decided that firms incorporated there could no longer be stateless for tax purposes.<\/p>\n In order to keep its tax rates low, Apple needed to find an offshore financial centre that would serve as the tax residency for its Irish subsidiaries.<\/p>\n In March 2014, Apple’s legal advisers sent a questionnaire to Appleby, a leading offshore finance law firm and source of much of the\u00a0Paradise Papers\u00a0leak.<\/p>\n It asked what benefits different offshore jurisdictions – the British Virgin Islands, Bermuda, the Cayman Islands, Mauritius, the Isle of Man, Jersey and Guernsey – could offer Apple.<\/p>\n The document asked key questions such as was it possible to “obtain an official assurance of tax exemption” and could it be confirmed that an Irish company might “conduct management activities\u2026 without being subject to taxation in your jurisdiction”.<\/p>\n They also asked whether a change of government was likely, what information would be visible to the public and how easy it would be to exit the jurisdiction.<\/p>\n Leaked emails also make it clear that Apple wanted to keep the move secret.<\/p>\n One email sent between senior partners at Appleby says: “For those of you who are not aware, Apple [officials] are extremely sensitive concerning publicity. They also expect the work that is being done for them only to be discussed amongst personnel who need to know.”<\/p>\n Apple chose Jersey, a UK Crown dependency that makes its own tax laws and which has a 0% corporate tax rate for foreign companies.<\/p>\n Paradise Papers\u00a0documents show Apple’s two key Irish subsidiaries, Apple Operations International (AOI), believed to hold most of Apple’s massive $252bn overseas cash hoard, and Apple Sales International (ASI), were managed from Appleby’s office in Jersey from the start of 2015 until early 2016.<\/p>\n This would have enabled Apple to continue avoiding billions in tax around the world.<\/p>\n Apple’s 2017 accounts showed they made $44.7bn outside the US and paid just $1.65bn in taxes to foreign governments, a rate of around 3.7%. That is less than a sixth of the average rate of corporation tax in the world.<\/p>\n Apple and Ireland vs the EU<\/strong><\/p>\n In August 2016, after a three-year investigation,\u00a0the European Commission finds that Ireland gave an illegal tax benefit to Apple.<\/p>\n The EC says Apple must repay Ireland taxes for the period within its remit of investigation, 2003-2013, a total of \u20ac13bn (\u00a311.6bn) plus interest of \u20ac1bn.<\/p>\n Ireland and Apple\u00a0launch an appeal.<\/p>\n Apple’s Tim Cook calls the EC ruling “total political crap”, with “no reason for it in fact or in law”. Ireland says the EU is encroaching on sovereign taxation. It fears multinationals will go elsewhere.<\/p>\n Ireland agrees to collect the \u20ac13bn, to be held in a managed escrow account pending the appeal verdict.<\/p>\n In October 2017, the EU says it will take Ireland to court as it has not yet collected the money. Ireland says it is complicated and it needs time.<\/p>\n Massive GDP spike<\/strong><\/p>\n When the “double-Irish” loophole was shut down, Ireland also created new tax regulations that companies like Apple could take advantage of.<\/p>\n One of the companies that Apple moved to Jersey, ASI, had rights to some of Apple Inc’s hugely valuable intellectual property.<\/p>\n If ASI sold the intellectual property back to an Irish company, the Irish company would be able to offset the enormous cost against any future profits. And since the IP holder, ASI, was registered in Jersey, the profits of the sale would not be taxed.<\/p>\n It appears Apple has done just that. There was an extraordinary 26% spike in Ireland’s GDP in 2015\u00a0which media reports\u00a0put down to intellectual property assets moving into Ireland. Intangible assets rose a massive \u20ac250bn in Ireland that year.<\/p>\n Ireland’s department of finance denied that the new regulations had been brought in to benefit multinationals.<\/p>\n It said Ireland was “not unique in allowing companies to claim capital allowances on intangible assets” and had followed “the international norm”.<\/p>\n Apple declined to answer questions about its two subsidiaries moving their tax residency to Jersey.<\/p>\n It also declined to comment when asked whether one of those companies had helped create a huge tax write-off by selling intellectual property.<\/p>\n Apple said: “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.<\/p>\n “The changes we made did not reduce our tax payments in any country. In fact, our payments to Ireland increased significantly and over the last three years we’ve paid $1.5bn in tax there.”<\/p>\n The papers are a huge batch of leaked documents mostly from offshore law firm Appleby, along with corporate registries in 19 tax jurisdictions, which reveal the financial dealings of politicians, celebrities, corporate giants and business leaders.<\/p>\n The 13.4 million records were passed to German newspaper\u00a0Sueddeutsche Zeitung\u00a0and then shared with the\u00a0International Consortium of Investigative Journalists\u00a0(ICIJ).\u00a0Panorama\u00a0has led research for the BBC as part of a global investigation involving nearly 100 other media organisations, including the\u00a0Guardian, in 67 countries. The BBC does not know the identity of the source.<\/p>\n Paradise Papers: Full coverage; follow reaction on Twitter using #ParadisePapers; in the\u00a0BBC News\u00a0app, follow the tag “Paradise Papers”<\/p>\n –<\/p>\n Source: BBC<\/p>\n","protected":false},"excerpt":{"rendered":" The world’s most profitable firm has a secretive new structure that would enable it to continue avoiding billions in taxes, the\u00a0Paradise Papers\u00a0show. 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 […]<\/p>\n","protected":false},"author":14,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[106],"tags":[224,3,2118],"yoast_head":"\n![](\"https:\/\/ichef.bbci.co.uk\/images\/ic\/720x405\/p05m6myz.jpg\")
<\/div>\n<\/figure>\nSource document: Apple questionnaire (extract)<\/h2>\n
![\"Graphic\"](\"https:\/\/ichef.bbci.co.uk\/news\/624\/cpsprodpb\/1112D\/production\/_98633996_d35a0892-264c-4e47-8945-03f2a4389adb.jpg\")
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\n![\"Apple](\"https:\/\/ichef.bbci.co.uk\/news\/624\/cpsprodpb\/9BFD\/production\/_98633993_bfd9f968-0738-437e-8130-1f702e8969f0.jpg\")
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\n![\"Graphic:](\"https:\/\/ichef.bbci.co.uk\/news\/624\/cpsprodpb\/13A14\/production\/_98640408_4cc69775-e56c-4b9d-b59e-6046b5b421c5.jpg\")
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\n![](\"https:\/\/ichef.bbci.co.uk\/images\/ic\/720x405\/p05m6mz5.jpg\")
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\n![\"Paradise](\"https:\/\/ichef.bbci.co.uk\/news\/624\/cpsprodpb\/9896\/production\/_98626093_pp_story_page_module_asset640-nc.png\")
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