Apple ‘secretly’ moved cash to Jersey to escape tax, Paradise Papers report claims

Apple’s tax practices have once again come under scrutiny following a BBC analysis of the Paradise Papers.

BBC Panorama’s Paradise Papers reporting team alleges Apple subsidiaries holding its untaxed offshore cash were shifted to Jersey in the Channel Islands.

According to the report Apple moved “most” of its offshore cash hoard to Jersey, which has a corporate tax rate of 0% for foreign companies.

The new tax haven enabled Apple to ‘sidestep’ a crackdown on an Irish tax loophole it had previously been exploiting, according to the report.

Until 2013 Apple had funneled earnings from outside of the Americas through Ireland, which enabled the company to pay as little as 2% in corporation tax.

The report claims the new structure enabled Apple to avoid paying billions in taxes, but the firm denies paying any less tax as a result of the move to Jersey.

Related: Apple’s unpaid tax bill – what you need to know

“The debate over Apple’s taxes is not about how much we owe but where we owe it. We’ve paid over $35bn in corporate income taxes over the past three years, plus billions of dollars more in property tax, payroll tax, sales tax and VAT,” the company said in a statement.

“We believe every company has a responsibility to pay the taxes they owe and we’re proud of the economic contributions we make to the countries and communities where we do business.”

Alternative arrangements

The BBC report cites evidence uncovered in the Paradise Papers suggesting Apple actively sought out an alternative arrangement from 2014 onwards.

It alleges that Apple lawyers sent a questionnaire to the offshore finance firm Appleby, seeking to discover what tax havens like the British Virgin Islands, Bermuda, the Cayman Islands, Mauritius, the Isle of Man, Jersey and Guernsey could do for Apple.

The questionnaire, among other things, asked whether it would be possible to “obtain an official assurance of tax exemption.”

Purposed leaked emails cited in the report also reveal Apple’s desire to keep the plans secret.

An alleged email exchanged between “senior partners” at the Appleby firm reads: “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.”

In August last year, the European Commission concluded that Ireland gave Apple “illegal tax benefits” and hit the firm with an £11.6 billion back taxes bill.

Apple and Ireland are currently appealing the ruling.

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