New revelations on Monday from the “Paradise Papers” shed light on Apple’s tax avoidance strategy, which shifted profits from one fiscal haven to another, as well as loopholes employed by Nike and Formula One champion Lewis Hamilton.
They are the latest disclosures from a trove of documents released by the US-based International Consortium of Investigative Journalists (ICIJ) concerning secretive offshore deals that have proved deeply embarrassing.
According to documents cited by the New York Times and the BBC, the offshore legal services firm Appleby helped the iPhone maker shift tens of billions of US dollars from Ireland to the Channel Islands when it appeared to face a tougher stand on taxes by Dublin.
Photo: AFP
The report said Apple transferred funds to the small island of Jersey, which typically does not tax corporate income and is largely exempt from EU tax regulations.
Apple did not immediately respond to an Agence France-Presse query on the report, but told the New York Times it follows the law in each country where it operates.
At a 2013 congressional hearing, Apple chief executive Tim Cook denied the use of “gimmicks” to avoid taxes.
The company is now facing an EU demand for about US$14.5 billion in taxes based on a ruling that its tax structure in Ireland amounted to illegal state aid.
The BBC and the Guardian newspaper reported that Hamilton avoided paying taxes on his private jet using an elaborate scheme now under investigation by British tax authorities.
The leaked documents showed the driver received a £3.3 million (US$4.4 million) tax refund in 2013 after his luxury plane was imported into the Isle of Man — a low-tax British Crown Dependency.
Representatives for Hamilton could not be reached by AFP for comment.
A separate report appearing in France’s Le Monde said Nike used a loophole in Dutch fiscal law to reduce its tax rate in Europe to just 2 percent compared with a 25 percent average for European firms.
The tax savings came from Nike’s use of an offshore subsidiary that charged royalties to the company’s European subsidiaries, the report said.
Meanwhile, the EU denounced the “shocking” revelations on the way top companies and dignitaries, including Britain’s Queen Elizabeth II, avoid taxes using offshore wealth hubs.
The documents showed that about £10 million of the queen’s private money was placed in funds held in the Cayman Islands and Bermuda, as first reported in UK by the BBC and the Guardian newspaper.
A spokesman for British Prime Minister Theresa May said that May “wants people to pay the tax that they owe,” while cautioning that holding offshore investments was not an automatic sign of wrongdoing.
“We have been clear that avoidance and evasion is never acceptable,” he said, ahead of the British parliament discussing the Paradise Papers on Monday.
A spokeswoman for the Duchy of Lancaster, which provides the monarch with an income and handles her investments, said: “All of our investments are fully audited and legitimate.”
Meanwhile, EU finance ministers meeting for regular talks in Brussels yesterday were to discuss tax avoidance after the trove of leaked documents exposed the great lengths to which the global elite will go to avert paying a fair tax.
“This new scandal shows once again that some companies and rich individuals are ready to do anything to not pay tax,” European Economics Affairs Commissioner Pierre Moscovici said.
“In light of these shocking revelations, I call on member states to rapidly adopt a European tax haven blacklist, as well as other dissuasive measures,” he said.
EU Commissioner for Competition Margrethe Vestager, who has cracked down on EU nations making illegal tax breaks to Apple and Amazon, lauded the journalists who made the latest revelations.
“Congratulations and thanks to ICIJ for all the work done on Paradise Papers. It enables the work against tax avoidance, for transparency,” Vestager said in a tweet.
Despite the tough talk from Brussels, Europeans have struggled to agree on the basis of an EU-wide tax haven blacklist.
Britain, Malta and other smaller EU nations are reluctant to include zero or near-zero corporate tax rates as one of the criteria to land on the EU’s blacklist.
The EU ministers are due to bridge their differences and draw up an official list of unwanted tax havens next month, whittling down an initial list of 92 countries finalized last year.
Sources said that EU officials have warned about 60 countries that their tax policies might be problematic, demanding further information before a Nov. 18 deadline.
‘IN A DIFFERENT PLACE’: The envoy first visited Shanghai, where he attended a Chinese basketball playoff match, and is to meet top officials in Beijing tomorrow US Secretary of State Antony Blinken yesterday arrived in China on his second visit in a year as the US ramps up pressure on its rival over its support for Russia while also seeking to manage tensions with Beijing. The US diplomat tomorrow is to meet China’s top brass in Beijing, where he is also expected to plead for restraint as Taiwan inaugurates president-elect William Lai (賴清德), and to raise US concerns on Chinese trade practices. However, Blinken is also seeking to stabilize ties, with tensions between the world’s two largest economies easing since his previous visit in June last year. At the
UNSETTLING IMAGES: The scene took place in front of TV crews covering the Trump trial, with a CNN anchor calling it an ‘emotional and unbelievably disturbing moment’ A man who doused himself in an accelerant and set himself on fire outside the courthouse where former US president Donald Trump is on trial has died, police said yesterday. The New York City Police Department (NYPD) said the man was declared dead by staff at an area hospital. The man was in Collect Pond Park at about 1:30pm on Friday when he took out pamphlets espousing conspiracy theories, tossed them around, then doused himself in an accelerant and set himself on fire, officials and witnesses said. A large number of police officers were nearby when it happened. Some officers and bystanders rushed
Beijing is continuing to commit genocide and crimes against humanity against Uyghurs and other Muslim minorities in its western Xinjiang province, U.S. Secretary of State Antony Blinken said in a report published on Monday, ahead of his planned visit to China this week. The State Department’s annual human rights report, which documents abuses recorded all over the world during the previous calendar year, repeated language from previous years on the treatment of Muslims in Xinjiang, but the publication raises the issue ahead of delicate talks, including on the war in Ukraine and global trade, between the top U.S. diplomat and Chinese
RIVER TRAGEDY: Local fishers and residents helped rescue people after the vessel capsized, while motorbike taxis evacuated some of the injured At least 58 people going to a funeral died after their overloaded river boat capsized in the Central African Republic’s (CAR) capital, Bangui, the head of civil protection said on Saturday. “We were able to extract 58 lifeless bodies,” Thomas Djimasse told Radio Guira. “We don’t know the total number of people who are underwater. According to witnesses and videos on social media, the wooden boat was carrying more than 300 people — some standing and others perched on wooden structures — when it sank on the Mpoko River on Friday. The vessel was heading to the funeral of a village chief in