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'Paradise Papers' Out Apple for Tax Shelter in Jersey Isle

'Paradise Papers' Out Apple for Tax Shelter in Jersey Isle

Leaked documents known as the "Paradise Papers" shed light on how the law firm was used by major corporations and the wealthy to avoid paying taxes.

That report points out that Formula One driver Lewis Hamilton also appears among those involved, as part of a kind of financial soap opera.

Up until 2014, the tech company had been exploiting a loophole in tax laws in the U.S. and the Republic of Ireland known as the "double Irish".

'It is not satisfactory for a foreign registered company to claim tax residence in Jersey without demonstrating a substance here.

With this maneuver, the group disclosed lower profits than it had in reality and paid fewer taxes. That is less than a sixth of the average rate of corporation tax in the world.

The list is long, because in Brazil, the ministers of Economy and Agriculture, Henrique Meirelles and Blairo Maggi, respectively, denied committing irregularity after knowing that their names appeared linked to companies in tax havens.

At the time, the iPhone manufacturer exploited legal ways to pay very low taxes outside the United States, parking its profits on the accounts of its Ireland-based entity.

A new report from the International Consortium of Investigative Journalists and its media partners says Apple sought out a new location to store its overseas cash to avoid paying higher taxes.

Apple has now released a press release in response to the recent allegations, they have said that they have not paid any less tax as a result of the changes, you can see a statement from the company below.

But by setting up a perfectly legal zero percent corporate tax rate structure in the Isle of Jersey, a BBC analysis found that with Apple making $44.7 billion in 2017 foreign profits outside the USA, the company only paid $1.65 billion, or 4 percent, in foreign taxes.

Apple enlisted the Bermuda-based law firm Appleby to help it restructure its offshore tax scheme.

Apple CEO Tim Cook slammed the ruling as "total political crap" and argued that there's "no reason for it in fact or in law".

One email from the Paradise Papers contains a 14-item questionnaire sent in March 2014 to Apple's offices in Bermuda, the British Virgin Islands, the Cayman Islands, Guernsey, the Isle of Man and Jersey.

Apple and Ireland are now appealing the ruling. "The changes we made did not reduce our tax payments in any country", he said.

In Apple's case, it held its cash in Ireland to pay a much smaller tax rate than the 35 percent level in the US.

"U.S. multinational firms are the global grandmasters of tax avoidance schemes that deplete not just USA tax collection but the tax collection of most every large economy in the world", said Edward Kleinbard, a former corporate tax adviser to such companies, now a law professor at the University of Southern California.