Paradise Papers: Apple shifted billions offshore to avoid tax
Apple has denied accusations in the Paradise Papers investigation that it moved its operations from Ireland to an offshore center to avoid tax.
Documents cited by German newspaper Süddeutsche Zeitung on Monday suggested that offshore law firm Appleby, which is based in multiple tax havens, helped the iPhone maker move billions of dollars in revenues collected in Ireland to the Channel Islands to head off increased European Union scrutiny of its tax affairs in Dublin.
The revelations, which were also published by the BBC and New York Times, suggested that Apple had transferred funds to the island of Jersey, near the coast of Normandy, which is largely exempt from European Union tax regulations and where no corporate income tax is levied.
The Paradise Papers are the result of a year-long investigation by the International Consortium of Investigative Journalists, which studied some 13.4 million leaked documents revealing the scale of offshore tax avoidance schemes employed by large multinationals and the rich and famous.
Read more:U2 frontman Bono named in Paradise Papers tax evasion leak
The iPhone maker insisted the new report contained several “inaccuracies” and said it made changes to its corporate structure in 2015, which were designed to preserve tax payments to the US, not to reduce taxes elsewhere.
Apple said in a statement that it pays taxes at the statutory US rate of 35 percent on investment income from its overseas cash. It added that it follows the law in each country where it operates. The EU and US were informed of the reorganization at the time, it added.
Apple’s European headquarters are in an unlikely location, on a hill overlooking the Irish city of Cork
The Cupertino, California-based company said it was the largest taxpayer in the world, paying $35 billion (€30 billion) in corporate income tax over the last three years, including $1.5 billion in Ireland.
Both the US and EU have been scrutinizing Apple for its use of tax avoidance schemes using offshore finance centers. In 2013, a US Senate subcommittee found the tech giant had eluded tens of billions of dollars and that some $128 billion in profits had not been taxed by US authorities.
The company is also facing an EU demand for about $14.5 billion in taxes based on a ruling that its tax structure in Ireland amounted to illegal state aid.
This week’s revelations could see Brussels step up efforts to force EU member states to close tax loopholes. France has recommended taxing multinationals on revenues generated in EU countries rather than profits, as they are more difficult to hide.
Read more: Offshore: The legal and the not so legal
EU competition commissioner Margrethe Vestager on Monday singled out Apple, Google and Facebook for censure in response to the Paradise Papers revelations.
She said “greed” and “power” were a very “poisonous cocktail” used by big multinationals to drive out competition.
Speaking at the Web Summit in Lisbon, Vestager also highlighted the difference in policy between the EU and US over free markets.
“We want free markets, but we understand the paradox of free markets, which is that sometimes we have to intervene. We have to believe that it’s not the law of the jungle, but the law of democracy that works.”
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Global elite named in Paradise Papers
Bono and Nude Estates
U2 frontman and activist Bono was one of the highest-profile players named in the papers. In an elaborate web of financial transactions, Bono invested in a Maltese company called Nude Estates that was involved in a shady deal over a Lithuanian shopping mall. Malta is famous for its liberal tax policies. A spokesman for the singer denied any wrongdoing.
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Global elite named in Paradise Papers
US commerce secretary
President Donald Trump’s Secretary of Commerce Wilbur Ross was listed in the papers for his interests in the Russian gas company Sibur. Ross has now been accused of failing to disclose his Russian connections to Congress during his confirmation hearing, though Ross has argued that as the company is not one facing US sanctions, he was not obliged to disclose them.
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Global elite named in Paradise Papers
Queen’s private estate in hot water
Queen Elizabeth II is provided an income by her private estate, the Duchy of Lancaster. According to the Paradise Papers, the duchy invested 10 million pounds ($13 million) in offshore accounts in Bermuda and the Cayman Islands. The estate has said that the investments are legal.
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Global elite named in Paradise Papers
Formula One champion
Reigning Formula One champion Lewis Hamilton reportedly avoided taxes on his private jet through an elaborate tax avoidance scheme, according go the Paradise Papers. The leaked documents show that Hamilton received a £3.3 million tax refund in 2013 after his plane was imported to the Isle of Man, a low tax British dependency located off the western coast of England.
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Global elite named in Paradise Papers
Germany’s former chancellor
Gerhard Schröder, leader of Germany from 1998 to 2005, was named for his management role at the Russian-British energy firm TNK-BP in 2009. The company was registered in the tax haven British Virgin Islands. In 2013, TNK-BP was bought by Russian energy giant Rosneft — where Schröder is now the independent director of the board.
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Global elite named in Paradise Papers
Colombia’s president caught
According to the papers, Colombian President Juan Manuel Santos is listed as the director of two offshore companies in Barbados. He previously claimed to have severed ties with them in 2000 when he became minister of finance.
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Global elite named in Paradise Papers
Lifestyles of the rich and famous
Not all of the revelations in the Paradise Papers necessarily detail illegal activity. But they do shed light on some of the strange investments and luxurious possessions of the world’s elite, including Microsoft co-founder Paul Allen’s yacht. Besides Microsoft, other US companies like Apple, McDonald’s, Facebook and Walmart were found to have ties to Appleby.
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Global elite named in Paradise Papers
Madonna medical supplies
One of the odd investments listed in the Paradise Papers is singer Madonna’s stake in a medical supply firm. Actress Keira Knightley was also found to have stock in a Jersey-based real-estate firm.
mm/aos (AFP, AP, Reuters)
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