This week the Paradise Papers data leak revealed that Apple, on the advice of law firm Appleby, moved subsidiaries to the Island after a tax loophole was closed in their previous base jurisdiction, the Republic of Ireland.
In response to accusations that it was using the scheme to avoid tax, Apple released a statement saying it ‘pays every dollar it owes in every country around the world’ and the move to Jersey did not reduce its tax liability in any country.
But Dame Margaret Hodge, the chairwoman of the UK government’s Public Accounts Committee, said that the move still helped Apple avoid tax in countries where it did business.
‘For Apple to piously declare that it is not paying less tax in Jersey than it was in Ireland as evidence of its good behaviour beggars belief,’ she said.
‘Of course it is not paying less tax, because it was not paying much tax in Ireland before. We want Apple to pay more tax – fair tax and proper tax – on the profits it makes from its business outside the USA.’
The Labour MP also said: ‘I congratulate the team at the Guardian and Panorama on their brilliant investigative work to make sense of the tens of millions of documents and files that the leaks contained. This is journalism at its best and I salute all the journalists.’
Apple’s statement in response to the leak and media coverage says that it moved a subsidiary to Jersey to ensure that its tax payments in the US were not reduced.
‘When Ireland changed its tax laws in 2015, Apple made changes to its corporate structure to comply,’ it says.
‘Since then, all of Apple’s Irish operations have been conducted through Irish resident companies. Apple pays tax at Ireland’s statutory 12.5 per cent. As part of these changes, Apple’s subsidiary which holds overseas cash became resident in the UK Crown Dependency of Jersey, specifically to ensure that tax obligations and payments to the US were not reduced.
‘Since then Apple has paid billions of dollars in US tax on the investment income of this subsidiary. There was no tax benefit for Apple from this change and, importantly, this did not reduce Apple’s tax payments or tax liability in any country.’
