Apple defends moving offshore...
Apple defends moving offshore profits to an island tax haven | Engadget Today
Apple defends moving offshore profits to the tax haven of Jersey
The company known for the 'double Irish' scheme is moving its subsidiaries' tax residency.
"A set of documents from offshore law firm Appleby has Apple stashed $250 billion in Jersey, a tiny island off the coast of France known for being a tax haven. The tech titan apparently secretly moved its pile of overseas profits to the island after the US and various European governments cracked down on the tax strategy it's been employing since the 1980's. Apple used to rely on an arrangement called the "double Irish," which advantage of Ireland's business-friendly tax policies.The company created Irish subsidiaries and attributed billions of dollars of profits made outside the US to them. It then avoided paying large amounts of taxes in the country by making it appear that the subsidiaries were being operated from California. Spoiler In the US, such a scheme works, because the government allows taxes on income produced by multinational corporations' foreign units to be deferred indefinitely.In 2013, however, Apple faced inquiries from a US Senate committee that lambasted the company for exploiting a system that saved it billions of dollars in taxes. A year later, the European Union investigated Apple's activities in Ireland and the company to pay $14.5 billion in back taxes. That's the same year Apple first emailed Appleby asking about possible alternative arrangements.Based on the documents leaked as part of Paradise Papers, Apple asked the Bermuda-based law firm what different offshore jurisdictions, including the British Virgin Islands, Bermuda, the Cayman Islands, Mauritius, the Isle of Man, Jersey and Guernsey, have to offer. When Ireland changed its tax laws in 2015, it gave companies operating out of the country the right to continue with their arrangements until December 2020. That gave Apple enough time to begin processing the change in residency of its two biggest Irish subsidiaries to Jersey, which corporate taxes (sans some exceptions) in 2008, with Appleby's help.Why is this such a big deal? Well, Apple said 70 percent of its profits come from outside the US, yet its foreign tax rates typically between two to five percent only. In the US, it would have paid a 35 percent tax rate on those profits.Republican senator John McCain