Apple moves worldwide cash to Jersey for tax reasons

Apple moves worldwide cash to Jersey for tax reasons”

The news outlet and the nonprofit investigative organization cited confidential records that were obtained by the German newspaper Suddeutsche Zeitung and shared. This would allow the company - after choosing which country offered the best "tax haven" - to change the "tax residency" of Apple Sales International (ASI) and Apple Operations International (AOI) to the particular country without effectively moving all of its operations to the said nation.

Apple previous had its European headquarters in Ireland and the EU regulators told both Apple and Ireland that the company did not pay enough taxes.

Last year, the EC ordered Ireland to collect back taxes of up to $14.5bn from Apple, having previously ruled that the firm's tax deals in the country constitute "illegal state aid".

Paradise Papers documents show Apple's two key Irish subsidiaries, Apple Operations International and Apple Sales International, were managed by Bermuda-based legal firm Appleby's office in Jersey from the start of 2015 until early 2016, the BBC said.

As Apple came under pressure in the USA 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. It chose Jersey in the Channel Islands, a UK Crown dependency that falls outside of European Union jurisdiction.

In 2015, this resulted in a GDP spike of 26% for the country. It said it pays an effective tax rate of 21 percent on foreign earnings. The third, AOE, became tax-resident here. The company has resisted bringing the money back to the USA because of the massive tax bill it would face.

An estimated $2.6bn in profits is parked overseas but in reality, most of this is in cash or cash equivalents in United States banks or U.S. treasury bonds.

Under the House GOP tax bill, the main federal tax rate would be 20%, not 35%, and overseas profits would no longer be subject to USA tax. The tax due would be payable over 8 years.

According to the New York Times, Apple has $236bn in Irish shell companies, followed by Pfizer at $178bn and Microsoft at $146bn.

The tax proposal caps the maximum tax rate on small businesses and other non-incorporated firms to 25% from the maximum rate on "pass-through" income of 39.6%.

"The changes we made did not reduce our tax payments in any country".

It comes just a few years after CEO Tim Cook defended the company's tax affairs.

This allowed Apple to funnel all its sales outside of the Americas - now about 55% of its revenue - through Irish subsidiaries that were effectively stateless for taxation purposes, and so incurred hardly any tax.

Mr Cook responded defiantly: "We pay all the taxes we owe, every single dollar".

"It will need to be addressed", Brady said.

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