The European Union’s competition commissioner has asked Apple to update details on its tax situation, following allegations that the company relocated some operations from Ireland to Jersey to avoid higher rates.
“I have been asking for an update on the arrangement made by Apple, the recent way they have been organized, in order to get the feeling whether or not this is in accordance with our European rules but that remains to be seen,” the Washington Post quoted Margrethe Vestager as saying at a technology summit in Lisbon, Portugal.
The official said that her requests for information actually predate the Jersey claims, but noted that it “remains to be seen if we will open more cases after the Paradise Papers.”
The Paradise Papers have exposed a myriad of offshore financial arrangements for individuals and businesses. To escape a crackdown on Irish tax loopholes, Apple reportedly turned to a Bermuda-based law firm, Appleby, to search for a place it could continue avoiding normal taxes on billions in international revenue. The company is said to have settled on Jersey, a U.K. crown depndency off the coast of France.
Apple subsequently posted a vehement denial online, saying that it didn’t move any operations or investments out of Ireland, or reduce its tax payments in any country.
Late last year the European Commission ordered Ireland to collect $14.5 billion in back taxes from Apple, arguing that it had extended preferential —and therefore illegal —state aid to the company. Both Apple and Ireland are pursuing appeals, though the Commission is bringing Ireland to court for missing a collection deadline.
Apple has some $252 billion in overseas cash reserves, but has refused to bring anything back to the U.S. unless it can avoid a standard 35 percent tax rate. The Republican party is seeking a plan that could drop taxes on repatriated cash to 12 percent —Apple CEO Tim Cook has voiced his support for lower corporate taxes, despite his opposition to Republicans on many other platforms like LGBT rights and immigration.