Apple is one of the richest corporations on earth, and it seems now that it got $252 billion richer from money that it allegedly hid offshore. In other words, an attempt at tax evasion at its best for a company valued at more than $900bn.
The allegations stem from documents, dubbed “Paradise Papers,” which have been obtained and analysed by global media.
The hideout of the ultra-low tax rate is no longer a secret, with Apple placing a majority of its untaxed offshore cash in Jersey, in the Channel Islands, as way to avoid a 2013 clampdown on its tax practices in Ireland.
Sky News reported that the company had allegedly been taking advantage of a tax loophole in the US and the Republic of Ireland up until 2014, allowing it to post revenues through Irish subsidiaries beyond the reach of taxing authorities, thus incurring very little in terms of taxes.
Sky News said that Apple denied such accusations with the tech company saying it still paid some of the biggest amounts of taxes worldwide, nearly $35bn over the past three years.
$252bn is a lot of money and could buy many toys (see below infographic), and with the Middle East figuring mightily on Apple books, would you be surprised at an Emirates Airlines-Apple deal to buy new Airbus A380s which the carrier plans to purchase? It looks like it can afford 577 of these aircraft.
The Middle East takes a big bite
According to Forbes, Apple is having a record performance in the Middle East. Q4 revenues were 30 per cent higher, helping drive record overall revenues.
“This was our biggest year ever in most parts of the world, with all-time record revenue in the United States, Western Europe, Japan, Korea, the Middle East, Africa, Central and Eastern Europe, and Asia,” Apple CEO, Tim Cook, told Forbes.
The company sales reached $229bn for its 2017 financial year, $14bn more than last year, and Q4 alone returned $52.6bn.
“Apple had with more than 30% growth in the Middle East, where the company saw double digit growth in sales of iPhones,” said Forbes.
“In the UAE, where the company recently launched Apple Pay, the iPhone X is retailing at $1,116. However, as of press time (Nov 7, 2017) online orders for the device were backed up for 3-4 weeks,” added Forbes.
Call back option on missing monies
The EU’s competition chief asked Apple to provide details of its latest tax structure, as regulators try to recover billions in back taxes to Ireland.
“In 2016, the European Commission ordered Apple to pay $14.4bn in back taxes to Ireland, after calculating that one year one of its subsidiaries paid a tax rate of 0.005 per cent,” said Sky News.
The TV said that not only Apple had to pay taxes, but also Lewis Hamilton, who is accused in the Paradise Papers of having attempted some shenanigans in relation to unmade tax payments on a $21 million private jet.
“Hamilton’s advisers set up a leasing deal which entitled the 32-year-old Mercedes driver to receive a $4.3m VAT refund on the red Bombardier Challenger 605, on the basis that the jet was for business use,” Sky News said.
“However, there are allegations it was used by Hamilton for personal use.”
Perhaps this bit of news might lead to devaluing some of those Formula 1 Mercedes F1 hybrids that Hamilton drives, in which case cash-rich Apple would become prime candidate as an interested buyer!
No but seriously, Hamilton lawyers have replied to this saying that there were no illegal issues here and added “it is not correct to say no VAT has been paid on any of the arrangements.”