Irish government helps Apple set up Double Irish structure in Jersey

One of the most significant revelations in the Paradise Papers relate to the corporate tax avoidance structures of Apple.

Irish MEP Matt Carthy, GUE/NGL co-coordinator on the Panama Papers committee, said: “The Paradise Papers reveal not only the secrets of the super-rich individuals who hide their wealth offshore – they also reveal the tax avoidance schemes of multinational corporations, including Apple, Nike, Glencore, Uber, Allergan and more.

“It is unsurprising that Apple went jurisdiction-shopping following the 2013 US Senate Inquiry into its tax avoidance schemes and specifically its use of three Irish subsidiaries to avoid paying tax. The Paradise Papers show that its lawyers, Baker McKenzie, sent a questionnaire to Appleby representatives in 14 different tax havens in 2014 brazenly requesting if they could confirm that the use of the Double Irish structure could work in these jurisdictions.”

Specifically they requested that these Appleby offices ‘confirm that an Irish company can conduct management activities (such as board meetings, signing of important contracts) without being subject to taxation in your jurisdiction’.

“Apple settled on Jersey – but this structure would have been impossible had the Irish government actually abolished the Double Irish in 2014. Instead, then-Minister Noonan gave in to corporate lobbyists in October 2014 and provided not only a ridiculously long phase-out period for existing companies until 2020, but also a grace period that would allow new companies to form until December 2014 and use the Double Irish until 2020,” Carthy said.

“This allowed Apple to relocate the ‘management and control’ of two out of three of its Irish subsidiaries – Apple Sales International and Apple Operations International – to Jersey in order to continue exploiting the notorious Double Irish scheme until 2020. How many more billions in profits will this scheme allow Apple to avoid paying in tax over this period?

“And what happened to the third Apple Irish subsidiary, Apple Operations Europe? It moved its intellectual property onshore in order to take advantage of the new intellectual property regime introduced by Noonan as the Double Irish phase-out announcement was made.

“A US expert cited in the New York Times estimates that Apple transferred $200 billion onshore in order to claim these overly generous tax deductions, and that as a result, any income Apple now generates in the Irish state could be partially offset by more than $13 billion in tax deductions every year for 15 years.”

Carthy concluded: “The current Irish finance minister needs to move away from the sycophantic approach of his predecessor and disavow this sweetheart relationship with some of the wealthiest corporations – and most notorious tax-dodgers – in the world. Apple has shown time and time again its contempt for ordinary taxpayers by using every trick in the book to avoid paying its fair share of tax.

“This is the company that the Irish government is desperately trying to avoid collecting 13 billion euros in unpaid taxes from, and is continuing to favour with preferential treatment. The government needs to stop wasting money on its appeal and act now to collect the taxes the Irish people are owed.”