New relevations about Apple’s tax avoidance strategy are making headlines as the Paradise Papers scandal unfolds further. EU finance ministers are due to discuss the issue during talks in Brussels on Tuesday.

Apple iPhone X

Apple has denied accusations in the Paradise Papers investigation that it moved its operations from Ireland to an offshore center to avoid tax.

Documents cited by German newspaper Süddeutsche Zeitung on Monday suggested that offshore law firm Appleby, which is based in multiple tax havens, helped the iPhone maker move billions of dollars in revenues collected in Ireland to the Channel Islands to head off increased European Union scrutiny of its tax affairs in Dublin.

Watch video02:35

‘Paradise Papers’ leak – Q&A with Robin Hodess, Transparency International

The revelations, which were also published by the BBC and New York Times, suggested that Apple had transferred funds to the island of Jersey, near the coast of Normandy, which is largely exempt from European Union tax regulations and where no corporate income tax is levied.

The Paradise Papers are the result of a year-long investigation by the International Consortium of Investigative Journalists, which studied some 13.4 million leaked documents revealing the scale of offshore tax avoidance schemes employed by large multinationals and the rich and famous.

Read more:U2 frontman Bono named in Paradise Papers tax evasion leak

The iPhone maker insisted the new report contained several “inaccuracies” and said it made changes to its corporate structure in 2015, which were designed to preserve tax payments to the US, not to reduce taxes elsewhere.

Apple said in a statement that it pays taxes at the statutory US rate of 35 percent on investment income from its overseas cash. It added that it follows the law in each country where it operates. The EU and US were informed of the reorganization at the time, it added.

Irland Apple Campus in Cork (Getty Images/AFP/P. Faith)Apple’s European headquarters are in an unlikely location, on a hill overlooking the Irish city of Cork

The Cupertino, California-based company said it was the largest taxpayer in the world, paying $35 billion (€30 billion) in corporate income tax over the last three years, including $1.5 billion in Ireland.

Both the US and EU have been scrutinizing Apple for its use of tax avoidance schemes using offshore finance centers. In 2013, a US Senate subcommittee found the tech giant had eluded tens of billions of dollars and that some $128 billion in profits had not been taxed by US authorities.

The company is also facing an EU demand for about $14.5 billion in taxes based on a ruling that its tax structure in Ireland amounted to illegal state aid.

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Transparency advocates see opportunity as outrage over leaks grows

This week’s revelations could see Brussels step up efforts to force EU member states to close tax loopholes. France has recommended taxing multinationals on revenues generated in EU countries rather than profits, as they are more difficult to hide.

Read more: Offshore: The legal and the not so legal

EU competition commissioner Margrethe Vestager on Monday singled out Apple, Google and Facebook for censure in response to the Paradise Papers revelations.

She said “greed” and “power” were a very “poisonous cocktail” used by big multinationals to drive out competition.

Speaking at the Web Summit in Lisbon, Vestager also highlighted the difference in policy between the EU and US over free markets.

“We want free markets, but we understand the paradox of free markets, which is that sometimes we have to intervene. We have to believe that it’s not the law of the jungle, but the law of democracy that works.”

mm/aos (AFP, AP, Reuters)

Courtesy: DW

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