Jersey Tax Haven: Apple Used Channel Island To Avoid US Taxes

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That then led Apple lawyers to look at six offshore tax havens that might allow an Irish subsidiary to "conduct management activities without being subject to taxation in these jurisdictions", according to the "Paradise Papers". Then, the company relocated its global corporate structure to Jersey in the beginning of investigation.

Until 2014, Apple channelled sales outside of America through Irish companies, which kept taxes low.

Apple paid nearly no tax on earnings of more than $100bn over four years, US Senator Carl Levin and former presidential candidate John McCain claimed, although Apple mounted a strong defence.

The documents, obtained by German newspaper Süddeutsche Zeitung, were reviewed by the International Consortium of Investigative Journalists (ICIJ), along with a number of publications, including the New York Times and the Guardian.

The response came after Subcommittee Chairman Carl Levin said that Apple had created "the Holy Grail of tax avoidance" schemes by forming a "double-Irish-flip".

Instead of paying Irish corporation tax of 12.5%, or the U.S. rate of 35%, Apple's avoidance structure helped it reduce its tax rate on profits outside of the United States to the extent that its foreign tax payments rarely amounted to more than 5% of its foreign profits, and in some years dipped below 2%.

The incentive, known as a capital allowance, offered Irish companies big tax deductions over many years if they spent money buying expensive intangible property.

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Reports yesterday from a new release of documents from the "Paradise Papers" stated that Apple settled on Jersey as its tax refuge. Apple's offshore profits aren't taxed by the U.S. and they're largely untouched by other governments.

The Papers are just a few of the hundreds of thousands leaked from offshore law firm Appleby, which recently warned its super-rich clients of a data breach in September previous year, reminiscent of the data breach in 2015 on Panamanian law firm Mossack Fonseca.

The new tax haven enabled Apple to "sidestep" a crackdown on an Irish tax loophole it had previously been exploiting, according to the report. "A coordinated legislative effort internationally will remove the current tug of war between countries over tax payments and ensure certainty of law for taxpayers".

"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". We do not depend on tax gimmicks.

The cache of 13.4 million secret documents came largely from Appleby, a Bermuda-based law firm that helps businesses and wealthy individuals find tax shelters.

Earlier this year, the European Commission revealed its intention to issue a noncompliance action against Ireland for failure to collect tax from Apple.

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