Apple, the maker of iPhone and MacBook, may be a Progressive darling and contributor to many left-leaning causes, but once again the company is facing scrutiny over its use of offshore tax havens.
Apple's corporate structure has come up in the Paradise Papers, an online leak of thousands of documents showing the lengths some companies and individuals go to avoid paying tax. It isn't the first time Apple's tax planning strategies have caused controversy. As The New York Times reports, Apple was criticized for using what were described as "ghost companies" in Ireland. When the Irish government began cracking down on such schemes in 2013, The Times says Apple went hunting for a new tax haven:
With help from law firms that specialize in offshore tax shelters, the company canvassed multiple jurisdictions before settling on the small island of Jersey, which typically does not tax corporate income.
Apple has accumulated more than $128 billion in profits offshore, and probably much more, that is untaxed by the United States and hardly touched by any other country. Nearly all of that was made over the past decade.
Apple is not alone in using such tactics and it is unclear how much of what has been disclosed would be illegal versus simply an aggressive form of tax planning.
The behind-the-scenes look into how some of the biggest companies in the world structure their affairs for tax reasons comes because of a leak of documents that mostly originate from the offices of the law firm Appleby, based in Bermuda:
The documents reveal how big law firms help clients weave their way through the gaps between different countries’ tax rules. Appleby clients have transferred trademarks, patent rights and other valuable assets into offshore shell companies, avoiding billions of dollars in taxes. The rights to Nike’s Swoosh trademark, Uber’s taxi-hailing app, Allergan’s Botox patents and Facebook’s social media technology have all resided in shell companies that listed as their headquarters Appleby offices in Bermuda and Grand Cayman, the records show.
President Trump has proposed changing American tax laws and lowering the corporate rate as a way to bring some of this offshore money back to America. While his proposals would help companies like Apple, it is well-known that they are not fans of the president or Republicans in general.
The Center for Responsive Politics shows that Apple, like much of Silicon Valley, has donated mostly to Democratic candidates. In fact, in last year's election cycle 88% of Apple's donations went to Democrats, and just 9% to Republicans.