Home / Business / Apple Reportedly Moved its Cash to the Isle of Jersey
Town in New Jersey

Apple Reportedly Moved its Cash to the Isle of Jersey

Apple Moved its Cash to the island of Jersey as the EU investigated its tax benefits in Ireland

Romain Dillet | TechCrunch

Last year, the European Union ordered Apple to pay up to $14.5 billion for illegal tax benefits in Ireland. The company expected some bad news when Commissioner Margrethe Vestager started the investigation in 2014, as the International Consortium of Investigative Journalists revealed in the Paradise Papers. Apple relocated its cash stockpile to the tiny island of Jersey after the beginning of the investigation back in 2014.

Jersey is located near the coast of Normandy. Only 100,000 people live there. More importantly, Jersey doesn’t usually tax companies.

For years, the company benefited from tax benefits in Ireland which were later ruled illegal by the EU Competition commission — a ruling Apple and Ireland are still fighting. Like many multinational companies, Apple incorporated multiple companies in Ireland.

The first Irish subsidiary called Apple Sales International was receiving most of Apple’s international profits. According to the ICIJ, it has reported more than $120 billion in revenue between 2009 and 2014.

A second subsidiary called Apple Operations International then received most of those $120 billion in dividends. And, you guessed it, those two subsidiaries then attributed the vast majority of their profit to a “head office.” This head office wasn’t based in any country on earth. The European Union started an investigation in June 2014, leading to the huge $14.5 billion fine.

“The Commission’s investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years. In fact, this selective treatment allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014,” Vestager wrote at the time.

It’s unclear if Apple is going to pay this fine as European governments are currently discussing a tax reform. French finance minister Bruno Le Maire thinks tech companies should be taxed based on actual revenue in European countries instead of profit, as tech companies will always find a way to hide their profits.

This tax avoidance structure was so popular among tech companies like Google and Facebook that it had a cute nickname — the Double Irish. Apple has continuously maintained that it complied with tax laws in Europe and the U.S., though it certainly took advantage of favorable tax laws in Ireland. Other European governments lobbied to put an end to the Double Irish back in 2014.

The European Union investigation combined with the ending of the Double Irish led Apple to Jersey. Offshore law firm Appleby helped Apple set up its tax home in Jersey. And Appleby’s internal documents were leaked to the German newspaper Süddeutsche Zeitung and the ICIJ.

Read the full story from TechCrunch

More business stories at LedeTree

About Romain Dillet

Romain Dillet
Romain is a writer at TechCrunch. Originally from France, Romain attended EMLYON Business School, where he specialized in entrepreneurship. He covers many things from mobile apps to fashion, Apple, AI and complex tech achievements. He also speaks at major tech conferences. He likes pop culture more than anything in the world.

Check Also

Flytrex Drone

North Dakota Golf Course is First to Have Food, Drink Delivery By Drone

Get in the Hole! Drone Delivery Comes to the Golf Course Is that a birdie? …

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.