Apple secretly moved parts of empire to Jersey after row over tax affairs

Apple reacted to widespread criticism of its tax affairs by secretly shifting key parts of its empire to Jersey as part of a complex rearrangement that has allowed it to keep an ultra-low tax rate, according to an analysis of Paradise Papers documents.

The move affected two of its most important subsidiaries, one of which is thought to hold the key to a company cash pile worth more than $250bn (£190bn).

Over the past three years, Apple has reported paying very low tax rates on its profits outside the US – not much more than previously. But this remains significantly lower than all the major markets where its phones, iPads and desktop computers are sold – and less than half the rate in Ireland, where the company has many of its subsidiaries.

Though Apple has done nothing illegal, the disclosure is likely to raise fresh questions for the technology company, which has been forced to defend its tax affairs. It may also prompt awkward questions about the nature of the new tax rules introduced by the Irish government and their timing.

Apple refused to answer detailed questions, but defended the new arrangements and said they had not decreased the company’s tax payment anywhere in the world.

“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,” it said.

“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.”

Edward Kleinbard, a former corporate lawyer who is a professor of tax law at the University of Southern California, told the International Consortium of Investigative Journalists: “US multinational firms are the global grandmasters of tax avoidance schemes that deplete not just US tax collection, but the tax collection of almost every large economy in the world.”



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