Why? Well, Jersey normally doesn’t tax companies.
The news was leaked in a trove of documents called the Paradise Papers, but after the leak of the papers, Apple was quick to publish a blog post arguing, once again, that it has paid all the taxes it should.
“The debate over Apple’s taxes is not about how much we owe but where we owe it,” said the company in its blog post. “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 revelation concerning Apple’s taxes is among the biggest in the Paradise Papers — it previously wasn’t known that Apple’s search for a new tax haven resulted in the company using Jersey as a way to shelter its profits. According to the documents, companies like Apple, Google, Starbucks, and more, have been hiring big law firms to help them transfer trademarks, patents, and more into offshore shell companies — helping them avoid billions in taxes.
You’d be forgiven for not having heard of Jersey — it’s a small island located between France and the United Kingdom that’s a “British Crown Dependency.” That technically means that it’s represented by the United Kingdom when it comes to international affairs, but the island isn’t really British. In fact, it’s pretty much self-governing, and even has its own legal systems and court of law.
The subsidiaries that made the island of Jersey their tax home were originally headquartered in Ireland, and Apple says it switched to Jersey to ensure that its “payments to the U.S. were not reduced.” At the time, Apple said that it didn’t move any operations from Ireland, but the leak of the Paradise Papers suggests otherwise.
We’ll continue to update this article as the story develops.
