European Union asks for more details of Apple's tax affairs

European Union asks for more details of Apple's tax affairs

European Union asks for more details of Apple's tax affairs

The Times reported that leaked documents suggest that Apple, Inc.'s CEO Tim Cook did not lie in sworn testimony to the Senate Permanent Subcommittee on Investigations in May 2013 when he stated that Apple does not "move intellectual property offshore and use it to sell our products back to the United States to avoid taxes".

The records, shared by the International Consortium of Investigative Journalists with the New York Times and other media partners, were obtained by the German newspaper Süddeutsche Zeitung.

Leaked documents have revealed how Apple went shopping around for a tax haven in 2014.

Apple on Monday responded to the claims, suggesting that the move was part of its corporate restructuring to comply with Ireland's rules and to ensure that "tax obligations and payments to the USA were not reduced".

The so-called "Paradise Papers" showed how Apple moved two of its Irish subsidiaries, including one holding most of its $252bn (£192.20bn) untaxed earnings, to the island of Jersey.

Five months after Cook's testimony, Irish officials began to crack down on the tax structure Apple had exploited. The company is the largest private employer in Cork and economists estimate Apple's operations in Ireland generate around $24 billion annually in salaries, taxes and investment.

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

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Apple is now facing an European Union demand for some $14.5 billion in taxes based on a ruling that its tax structure in Ireland amounted to illegal state aid. We do not depend on tax gimmicks.

"We believe every company has a responsibility to pay the taxes they owe and we're proud of the economic contributions we make to the countries and communities where we do business". "The changes we made did not reduce our tax payments in any country".

An Apple spokesman told the New York Times that the company told regulators in the U.S. and European Commission of the reorganisation of its Irish subsidiaries at the end of 2014, and said the moves did not reduce its tax payments in any country. The selective treatment allowed Apple to pay an effective corporate tax rate of 1 percent on European profits in 2003, according to the commission past year.

The disclosures come on the heels of last week's proposals by Republican lawmakers to provide several new tax benefits for multinational companies, including cutting the federal corporate income tax rate to 20 percent from 35 percent.

Apple's hunt for a tax haven is a familiar tale, said Reuven Avi-Yonah, director of the worldwide tax program at the University of Michigan Law School, who also reviewed the Appleby documents.

MORE: Paradise Papers: how do offshore tax avoidance schemes work?

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