The recent leak made by the German newspaper brought to light a number of accounts, which were investing cash in offshore tax havens. Reports now state that Apple was amongst the investors, and has managed to avoid billions in taxes through its offshore account.
The Paradise Papers leak exposed numerous individuals as well as companies that had made large investments in offshore tax havens. Prominent individuals on the list included Canadian PM, Justin Trudeau’s cabinet and the Queen of England. The list also included the prominent tech company, Apple.
According to information released by the Papers, Apple managed to avoid a major crackdown on its Irish tax practices by channeling its profits into a tax haven.
The crackdown, which took place in 2013, led apple to invest in an untaxed offshore account. The current value of the Channel Island account is said to be $252bn. Sources say this move allowed Apple to save billions on tax payments.
However, the company denies all such claims. It states that the move did not affect its tax bracket in the least. Apple argued that it currently paid close to $35bn in taxes, making it the world’s highest taxpayer.
The company added that it stayed within the confines of the law, and any changes made did not “reduce” their tax payments in any country. The tech company released an additional statement saying no operations or investments have been moved from Ireland.
However, there can be no denying that Apple has already had its skirmishes with tax law. Until 2014, Apple made use of a loophole in tax laws in the U.S. and Ireland.
The loophole, named the “double Irish”, allowed the company to channel all its sales outside the Americas through Irish subsidiaries. This meant that the company managed to pass off nearly 55% of its revenue with barely any tax repercussions.
Apple managed to reduce its tax rates so well that it’s foreign tax payments rarely added up to more than 5% of its foreign profits. The company even admitted to years when the payments were below 2%.
Apple was slammed in 2013 by the U.S. Senate, which forced Apple’s CEO to defend its tax system.
Despite repeated pressure from the U.S. government to accept its follies, Apple maintained that it payed “every single dollar” it owed. Apple even stated that it did not “stash” money on any “Caribbean island”.
However, with the recent data released by the Paradise Papers, may be Apple will rethink its vehement statements.