Apple responds after leaked records show overseas profits being moved to avoid taxes | iLounge News

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Apple responds after leaked records show overseas profits being moved to avoid taxes

Leaked documents show Apple began to move its offshore profits to the English Channel island of Jersey after heat from the European Union threatened to compromise its low-tax arrangement in Ireland, The New York Times reports. The records show Apple solicited the help of law firms that specialize in creating offshore tax shelters to research multiple tax jurisdictions before settling on Jersey, an independent island outside of EU jurisdiction that usually doesn’t tax corporate income. By the end of 2014, Apple had relocated Apple Sales International and Apple Operations International from Ireland to Jersey and moved Apple Operations Europe to Ireland, shuffling around its tax homes just ahead of Ireland’s new policy of allowing existing companies or those created before December 2014 to claim $1 billion in tax credits every year for up to 15 years if they transfer the rights to intellectual property to an Irish company — even if it’s a transfer from one company’s subsidiary to another.

Apple spokesman Josh Rosenstock told The TImes that the company notified the US, Ireland and the EU about the reorganization of its Irish subsidiaries and claims, “The changes we made did not reduce our tax payments in any country.” But that skirts the issue since the EU was coming down on Apple for using Irish tax laws that allow companies that prove they are “managed and controlled” abroad to escape much of their income tax responsibilities. 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 is still fighting its legal fight over billions in alleged back taxes with the EU, and issued a rare public statement claiming that it pays billions in US taxes at the 35 percent corporate tax rate along with 21 percent in taxes on its foreign earnings, adding that, “The debate over Apple’s taxes is not about how much we owe but where we owe it.”

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