Paradise Papers reveal how Apple is a grandmaster of tax avoidance

Of all the companies exposed for tax-avoidance schemes in the Paradise Papers, Apple has the most at stake.

In 2013, when congressional investigators were bearing down on Apple’s decades-old tax avoidance schemes in Ireland, and Irish officials were preparing to end such tax residencies, the company needed a new tax home.

Details from the leaked “Paradise Papers” over the weekend reveal Apple ended up secretly parking hundreds of billions in the English Channel island of Jersey, according to the first report on the leak, in the New York Times. The Papers are drawn from millions of documents from the office of Appleby, a Bermuda-based law firm that specializes in creating legal offshore tax shelters for multinationals and wealthy individuals.

In Apple’s search for a parking place, Appleby served as something like a “general contractor,” per the Times, and the multinational law firm Baker McKenzie directed the effort. After working with Appleby, the California-based tech giant settled on Jersey as its new primary offshore tax shelter, because it is not a member of the European Union, and its extensive connections to the English banking sector.

More broadly, Silicon Valley giants like Apple have socked away hundreds of billions of dollars from U.S. and other tax authorities, instead negotiating sweetheart deals with individual governments to protect their profits. In 2016, Apple’s $246 billion hoard — 94 percent of which was held overseas — accounted for 13 percent of the cash held by non-financial companies in the U.S., according to Moody’s; it’s the highest for any of those companies.

And Apple isn’t the only major U.S. company that’s been implicated in the Paradise Papers. Nike, Tesla, and Uber have all been mentioned in press reports on the Papers for their complex offshore tax schemes, and investments in Facebook and Twitter were revealed to have been funded by companies controlled by the Kremlin. A representative for Apple did not respond to a request for comment from VICE News.

Left-wing Democratic members of Congress have long condemned U.S. multinationals for parking cash abroad to duck the IRS, but these companies have been lobbying hard to bring their offshore dollars home at a reduced rate. The new House Republican tax reform plan would allow these companies to repatriate their cash from abroad at a 12 percent corporate tax rate; the current corporate income tax is about 35 percent, and the GOP would like to reduce it to 20 percent.

In the European Union, however, Apple is under immense pressure to cough up $14.6 billion in back taxes that it avoided paying in Ireland between the early 1990s and 2014. Apple and Ireland, which inked the sweetheart deal when the country was in desperate poverty in the 1980s, are fighting back against the EU together.