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An activist sticks posters urging Apple to "pay your taxes" on a store in Aix-en-Provence, France | Christine Poujoulat/AFP via Getty Images
EU queries Apple over moving to low-tax Jersey
Newly released documents show the company had moved the management of two of its corporate units to low-tax Jersey by 2015.
LISBON — European competition authorities have been in contact with Apple over the company’s complex tax arrangements disclosed in the Paradise Papers, according to Margrethe Vestager, the EU’s antitrust chief.
Vestager said Tuesday that European Commission officials asked for an update from the iPhone maker on its current tax structure, part of which now involves Apple using corporate entities in low-tax Jersey, a British crown dependency, to avoid paying higher taxes in other jurisdictions.
The Danish politician said contact had been made before the revelations on Apple’s tax structures were made public Monday. She added that EU officials were in regular contact with Apple and government authorities in Ireland where some of the company’s units are also housed for tax purposes.
“We’re asking for an update from Apple to get a feeling if it’s in accordance with EU rules,” Vestager told journalists at the Web Summit, a tech conference in Lisbon. “We’ve taken an interest in getting to know how Apple is arranged now.”
The so-called Paradise Papers represent a massive disclosure of previously confidential documents about the tax activities of many of the world’s largest companies and high-profile celebrities.
In the case of Apple, which already has been ordered by the Commission to repay €13 billion in back taxes to Ireland, the released documents show that the company had moved the management of two of its corporate units to low-tax Jersey by 2015. This change, in part, was on the heels of a clampdown in Ireland on companies that used complex tax structures to shield themselves from paying tax.
In response, Apple said that it remained one of the world’s largest corporate taxpayers, and the restructuring of its units from Ireland to Jersey did not represent an attempt to avoid paying tax.
“The debate over Apple’s taxes is not about how much we owe but where we owe it,” the company said in a statement. “The vast majority of the value in our products is indisputably created in the United States — where we do our design, development, engineering work and much more — so the majority of our taxes are owed to the U.S.”
Vestager said Europe is demanding that companies pay the appropriate amount of tax on activities conducted in Europe, and any accusations that EU officials were unfairly looking to collect taxes from international firms was unfounded.
“This is about profits generated here, not about what should be taxed by U.S. authorities,” she said.
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