Published: Fri, November 10, 2017
Global | By Marsha Munoz

Apple's offshore move has allegedly helped save them billions in taxes


If the company didn't stop paying taxes because of the shift to Jersey, it's only because its arrangement with Ireland - which was rapidly showing signs of coming to an abrupt and public end - had been preventing tax collection for years. Apple responded by moving its money somewhere a bit sunnier.

"We pay all the taxes we owe, every single dollar", Apple CEO Tim Cook told USA senators in 2013, at a hearing of the Senate Permanent Committee on Investigations concerning how his company had avoided tens of billions of dollars in taxes by moving its profits to subsidiaries it owned in Ireland.

After the European Union 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. About 94% of that, $252.3 billion, is held by overseas subsidiaries, while 63% of Apple's net sales come from foreign markets. While press attention focused on Ireland's crackdown on the double Irish, officials announced a measure that gave Ireland more appeal: The country expanded its tax deductions for companies that move rights to intellectual property - like patents and trademarks - into Ireland.

"Apple believes every company has a responsibility to pay its taxes, and as the largest taxpayer in the world, Apple pays every dollar it owes in every country around the world", the statement reads.

Bringing offshore money back to be taxed in the States is one goal of the GOP tax bill now in Congress.

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"US multinational firms are the global grandmasters of tax avoidance schemes that deplete not just USA tax collection but the tax collection of most every large economy in the world", former corporate tax adviser Edward Kleinbard was quoted as saying by the NYT.

The BBC's Panorama programme and the Guardian newspaper claimed that U.S. tech giant Apple received advice from Appleby about relocating two subsidiaries to Jersey, helping it to avoid tax on $252 billion in cash that it holds offshore.

"The changes we made did not reduce our tax payments in any country".

While critics have decried the Republican tax bill as a corporate handout, others argue that a tax overhaul is needed precisely because of the current system.

The Irish government said last month that while it has "never accepted the Commission's analysis" in the Apple case, it was working to recover the taxes. In general, Apple rarely paid more than 5 percent of its overseas profits to foreign governments in taxes. Argentina's La Nacion newspaper reported that Caputo, before his appointment as minister, managed a US-based investment fund with activites in the Cayman Islands and Delaware.

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With the European Commission forcing Ireland to claim $14.5 billion in back taxes, Apple's advisers began shopping around for another tax refuge.

"We pay all the taxes we owe", he said from the dais, "every single dollar".

Apple on Monday responded to the claims, suggesting that the move was part of its corporate restructuring to comply with Ireland's rules and to ensure that "tax obligations and payments to the USA were not reduced".

"Apple sought the Holy Grail of tax avoidance: offshore corporations that it argues are not, for tax purposes, resident anywhere in any nation", then-Sen.

$252bn is a lot of money and could buy many toys (see below infographic), and with the Middle East figuring mightily on Apple books, would you be surprised at an Emirates Airlines-Apple deal to buy new Airbus A380s which the carrier plans to purchase? Apple's innovation and investment supports a further 12,000 jobs across Ireland.

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