Wed, Nov 08, 2017 - Page 7 News List

Papers reveal offshore deals with Apple, others

BLACKLIST:EU finance ministers were to discuss tax avoidance at a meeting yesterday, but the bloc has long struggled to agree on the basis of a tax haven blacklist


British driver Lewis Hamilton celebrates after winning his fourth Formula One world title on Oct. 29, despite finishing the Mexican Grand Prix in ninth place, at the Hermanos Rodriguez circuit in Mexico City.

Photo: AFP

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.

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.

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