Apple's solution to tax crackdown; find a new loophole

Adjust Comment Print

An inquiry by the bipartisan United States senate committee into Apple's use of Irish subsidiaries to avoid paying billions of dollars in taxes and worldwide pressure led to Ireland planning to crackdown on shadow companies in October 2013. And even if the company can get an "official assurance of tax exemption" - even better!

The documents revealed that Apple approached Appleby, a Bermuda-based law firm known for managing offshore companies.

Congressional Republicans are also seeking to impose a 10 percent tax on some of the profit that US businesses say is earned offshore - half the rate they are proposing for profit in the United States.

True enough. The island Apple would soon rely on was in the English Channel.

As Apple came under pressure in the United States 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.

The documents, obtained by German newspaper Süddeutsche Zeitung, were reviewed by the International Consortium of Investigative Journalists (ICIJ), along with a number of publications, including the New York Times and the Guardian.

Apple said the new structure had not lowered its taxes.

Senate Dems demand Sessions clarify testimony on Russian Federation
In testimony before the Senate in June, Sessions said he did not "recall" any meetings between campaign associates and Russian officials.

In a lengthy statement on its website, Apple says it pays "every dollar it owes in every country around the world", adding: "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". CEO Tim Cook appeared before Congress in early 2013 to defend Apple's strategy of holding most of its cash in Ireland.

The paper said Apple has $128 billion in offshore profits not taxed by the U.S.

"As the largest taxpayer in the world we've paid over $35 billion in corporate income taxes over the past three years, plus billions of dollars more in property tax, payroll tax, sales tax and VAT". "The changes we made did not reduce our tax payments in any country". The tax-avoidance scheme involved allegedly transferring tech patent portfolios to Ireland; then allegedly using Irish and Dutch subsidiaries in the Caribbean to shift profits to low-tax jurisdictions; and then allegedly moving those profits on to virtually "no tax" jurisdictions. Nike triumphed over the Internal Revenue Service in a fight over back taxes a year ago; a similar dispute between the IRS and Facebook is continuing.

A lawyer representing Hamilton insists the tax arrangement is legal.

Apple said it believes comprehensive global tax reform is essential, and that it has for many years been advocating for simplification of the tax code.

"This is how it usually works: You close one tax shelter, and something else opens up", he said.

Comments