0 Paradise Papers: Apple's secret tax bolthole revealed

They reveal how Apple sidestepped a 2013 crackdown on its controversial Irish tax practices by actively shopping around for a tax haven.
It then moved the firm holding most of its untaxed offshore cash, now $252bn, to the Channel Island of Jersey.
Apple said the new structure had not lowered its taxes.
It said it remained the world's largest taxpayer, paying about $35bn (£26bn) in corporation tax over the past three years, that it had followed the law and its changes "did not reduce our tax payments in any country".
In a further statement the company stressed that no operations or investments had been moved from Ireland.
The Paradise Papers is the name for a huge leak of financial documents that is throwing light on the world of offshore finance.
Up until 2014, the tech company had been exploiting a loophole in tax laws in the US and the Republic of Ireland known as the "double Irish".
This allowed Apple to funnel all its sales outside of the Americas - currently about 55% of its revenue - through Irish subsidiaries that were effectively stateless for taxation purposes, and so incurred hardly any tax.
Instead of paying Irish corporation tax of 12.5%, or the US rate of 35%, Apple's avoidance structure helped it reduce its tax rate on profits outside of the US to the extent that its foreign tax payments rarely amounted to more than 5% of its foreign profits, and in some years dipped below 2%.
The European Commission calculated the rate of tax for one of Apple's Irish companies for one year had been just 0.005%.
Apple came under pressure in 2013 in the US Senate, when CEO Tim Cook was forced to defend its tax system.
Angry that the US was missing out on a huge amount of tax, then-Senator Carl Levin told him: "You shifted that golden goose to Ireland. You shifted it to three companies that do not pay taxes in Ireland. These are the crown jewels of Apple Inc. Folks, it's not right."
Mr Cook responded defiantly: "We pay all the taxes we owe, every single dollar. We do not depend on tax gimmicks... We do not stash money on some Caribbean island."

Apple's questionnaire

After the EU announced in 2013 that it was investigating Apple's Irish arrangement, the Irish government decided that firms incorporated there could no longer be stateless for tax purposes.
In order to keep its tax rates low, Apple needed to find an offshore financial centre that would serve as the tax residency for its Irish subsidiaries.
In March 2014, Apple's legal advisers sent a questionnaire to Appleby, a leading offshore finance law firm and source of much of the Paradise Papers leak.
It asked what benefits different offshore jurisdictions - the British Virgin Islands, Bermuda, the Cayman Islands, Mauritius, the Isle of Man, Jersey and Guernsey - could offer Apple.
The document asked key questions such as was it possible to "obtain an official assurance of tax exemption" and could it be confirmed that an Irish company might "conduct management activities… without being subject to taxation in your jurisdiction".
They also asked whether a change of government was likely, what information would be visible to the public and how easy it would be to exit the jurisdiction.

Source document: Apple questionnaire (extract)

Leaked emails also make it clear that Apple wanted to keep the move secret.
One email sent between senior partners at Appleby says: "For those of you who are not aware, Apple [officials] are extremely sensitive concerning publicity. They also expect the work that is being done for them only to be discussed amongst personnel who need to know."

Apple chose Jersey, a UK Crown dependency that makes its own tax laws and which has a 0% corporate tax rate for foreign companies.
Paradise Papers documents show Apple's two key Irish subsidiaries, Apple Operations International (AOI), believed to hold most of Apple's massive $252bn overseas cash hoard, and Apple Sales International (ASI), were managed from Appleby's office in Jersey from the start of 2015 until early 2016.
This would have enabled Apple to continue avoiding billions in tax around the world.
  • Paradise Papers: All you need to know
Apple's 2017 accounts showed they made $44.7bn outside the US and paid just $1.65bn in taxes to foreign governments, a rate of around 3.7%. That is less than a sixth of the average rate of corporation tax in the world.
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0 Sex trafficking bill gets tech firms' backing

The Internet Association, which counts Facebook, Google and Amazon among its members, had at first said the proposed law could hurt innovation.
But in a statement released on Friday the group said it was satisfied with “important changes” made to the bill.
US senators are expected to hold an initial vote on the Stop Enabling Sex Traffickers Act (Sesta) next week.
"This important bill will hold online sex traffickers accountable and help give trafficking survivors the justice they deserve,” said Senator Robert Portman of Ohio, one of the bill’s authors.
“I’m pleased we’ve reached an agreement to further clarify the intent of the bill and advance this important legislation.”
Technology companies had been opposed to the bill because of changes it would have made to Section 230 of the Communications Decency Act, enacted in 1996.
The section represents a pillar of internet law - one which protects internet companies from the actions of its users. For example, if a person uses YouTube to break the law by showing something illegal, the user, and not YouTube, is held legally responsible. The Internet Association argued that this framework meant fledgling companies were not burdened by huge, perhaps insurmountable legal risk.

'Important changes'

The compromise that finally got the technology companies on board, after going back-and-forth since August, relates to whether a site is “knowingly” aiding traffickers on their platform. The bill now clarifies that a site needs to be "assisting, facilitating or supporting" human trafficking in order to face prosecution.
"Internet Association is committed to combating sexual exploitation and sex trafficking online and supports Sesta,” said Internet Association President Michael Beckerman on Friday.
"Important changes made to Sesta will grant victims the ability to secure the justice they deserve, allow internet platforms to continue their work combating human trafficking, and protect good actors in the ecosystem.”
Amanda Hightower, executive director at Seattle-based Real Escape from the Sex Trade (Rest), told the BBC she welcomed the news.
"With the bulk of trafficking happening over the internet, it's essential we have legislation and safeguards in place to protect victims and reduce the risk of people being sold online," she said.
"Knowing that internet giants are now joining forces with legislators to reduce the potential of trafficking gives me hope that we are heading in the right direction to stop this crime and that those who facilitate trafficking online will be held responsible."

Wording 'still too vague'

The rewritten components will protect companies that take pro-active measures to remove advertisements that enable trafficking and the sale of sex, but will pave the way for prosecutors to more effectively go after sites that allegedly allow such activity to flourish.
A woman stands at the door of a hotel room
In the crosshairs of US law enforcement is Backpage.com, a site described by California prosecutors as a “massive online brothel” that actively encourages the sale of sex through its listings website. Backpage.com did not return the BBC’s request for comment on Friday.
Despite the changes, some corners of the technology community are still concerned about the bill’s effects. Engine, a non-profit group that pushes the interests of start-ups in Washington, said the new wording was still too vague.
“While the bill sponsors have made improvements to someA woman stands at the door of a hotel room of the drafting problems in the original language, the changes do not address many of the startup community's concerns,” said Rachel Wolbers, Engine’s policy director.
"The bill still creates uncertainty for platforms regarding their obligations under the law and potentially penalises startups for content that they are unaware of and cannot control."
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0 Trump rages on Twitter at Clinton and Russia inquiry 'witch hunt'

His Sunday morning outburst came amid reports that the first arrest in the Russian collusion inquiry would be made this week, possibly as early as Monday.
Mr Trump insisted allegations of collusion between his campaign and Russia were "phony" and a "witch hunt".
He said Republicans were united behind him, before urging: "DO SOMETHING!"
Media reports say the first charges have been filed in the investigation led by special counsel Robert Mueller into alleged Russian interference in the 2016 election to assist Mr Trump.
It is not clear what the charges are and whom they are targeting, CNN and Reuters report, quoting unnamed sources.
Donald Trump
Mr Trump issued a series of four tweets on Sunday morning:
  • "Never seen such Republican ANGER & UNITY as I have concerning the lack of investigation on Clinton made Fake Dossier (now $12,000,000?),....
  • "...the Uranium to Russia deal, the 33,000 plus deleted Emails, the Comey fix and so much more. Instead they look at phony Trump/Russia,....
  • "...'collusion,' which doesn't exist. The Dems are using this terrible (and bad for our country) Witch Hunt for evil politics, but the R's...
  • "...are now fighting back like never before. There is so much GUILT by Democrats/Clinton, and now the facts are pouring out. DO SOMETHING!"
About an hour later he tweeted: "All of this 'Russia' talk right when the Republicans are making their big push for historic Tax Cuts & Reform. Is this coincidental? NOT!"
  • Who's who in the drama to end all dramas?
  • Russia: The 'cloud' over the Trump White House
Critics on Twitter were quick to accuse him of attempting to divert attention from the Russian investigation by complaining about the lack of focus on an opponent he defeated in the presidential election nearly a year ago.
US intelligence agencies have already concluded that the Russian government sought to help Mr Trump win the election.
Mr Mueller's investigation is looking into any links between Russia and the Trump campaign. Both deny there was any collusion.
His team is known to have conducted extensive interviews with several current and former White House officials.
Mr Mueller, a former FBI director, was appointed by the department of justice as special counsel in May shortly after Mr Trump fired FBI director James Comey.
Mr Trump said on Friday that it was now "commonly agreed" that there was no collusion between him and Russia but said that there were links between Moscow and Mrs Clinton.
Republican lawmakers have said that a uranium deal with a Russian company in 2010, when Mrs Clinton was secretary of state, was sealed in exchange for donations to her husband's charity.
A Congressional investigation has been opened into the case. Democrats say it is an attempt to divert attention from the alleged ties between Russia and Mr Trump.
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0 Burundi leaves International Criminal Court amid row

It accused the ICC of deliberately targeting Africans for prosecution.
The government of Burundi is accused of committing crimes against humanity, including execution and torture. The UN Commission of Inquiry is urging the ICC to open a prosecution soon.
In theory its withdrawal from the ICC has no effect on the court's ongoing investigations on the country.
Fadi El-Abdallah, a spokesman for the ICC, told the BBC's Newsday programme that "article 127 states that withdrawal does not affect the jurisdiction of the ICC over the crimes that have been committed" while the country was a member.
But the case of Sudan's President Omar al-Bashir, one of the ICC's "most wanted", has highlighted the difficulty of getting a non-member to co-operate in surrendering suspects.
A bloodied man in a pit begs as he is surrounded by soldiers


The withdrawal comes a year after Burundi lodged an official notice to quit the organisation, which has 122 member countries, 34 of which are African nations.
In 2015, Burundi saw major unrest and a crackdown by the security forces after President Pierre Nkurunzize decided to run for office for a third time, leading to protests from the opposition which deemed it unconstitutional.
The BBC's Anna Holligan in The Hague, where the ICC is based, says Burundi's decision to leave the ICC is unprecedented - a statement that if you don't like the focus of the prosecutor, you can simply leave.
She adds that the real impact - and whether or not it creates a domino effect - will be determined by what happens next.
Kenya and South Africa have made similar threats to withdraw their membership.
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0 Catalonia independence: Rajoy dissolves Catalan parliament

Mr Rajoy said the unprecedented imposition of direct rule on Catalonia was essential to "recover normality".
Catalans wave flags as they celebrate parliament declaring independence
He is also firing Catalan leader Carles Puigdemont and his cabinet.
The crisis began when Catalan leaders held an independence referendum, defying a ruling by the Constitutional Court which had declared it illegal.
  • Barca coach ducks Catalan crisis questions
  • Catalonia crisis: What next for Spain?
  • What powers does Catalonia have?
The Catalan government said that of the 43% of potential voters who took part, 90% were in favour of independence. Others boycotted the vote after the court ruling.

What did the Spanish PM say?

On Friday the Spanish Senate granted Mr Rajoy's government the power to impose direct rule on Catalonia, and after an emergency cabinet meeting Mr Rajoy spelled out what that would entail.
"The president [Carles Puigdemont] had the opportunity to return to legality and to call elections," he said.
"It is what the majority of the Catalonian people asked for - but he didn't want to do it. So the government of Spain is taking the necessary measures to return to legality."
Regional elections are scheduled for 21 December. Mr Rajoy also announced the sacking of the Catalan police chief.

Rajoy's dangerous move

By Sarah Rainsford, BBC News, Madrid
Spain's prime minister may have hoped warning Catalonia against declaring independence would be enough. Now he has to follow through on his pledge to impose direct rule, knowing this is highly risky.
Mariano Rajoy argues that Catalan separatists left him no choice. He had to act, to return the region to "legality", as Madrid puts it. But actually doing that will be complex and highly fraught.
It's why Mr Rajoy called for calm in Spain, after the Catalan vote for independence. He is acting with broad, cross-party support though, and public backing.
Here in Madrid many people have begun flying the Spanish national flag from their windows and balconies, to show their support for keeping the country united.
There is some sympathy for the Catalan cause, mostly because of the police crackdown during the referendum. But far louder are calls to prosecute those pushing for independence. It's a move which many Spaniards, like their government, are convinced was illegal.

What happened in the Catalan parliament?

A motion declaring independence was approved on Friday with 70 in favour, 10 against, and two abstentions in the 135-seat chamber. Several opposition MPs boycotted the vote.
Mr Puigdemont has urged supporters to "maintain the momentum" in a peaceful manner.
Separatists say the move means they no longer fall under Spanish jurisdiction.
But the Spanish Constitutional Court is likely to declare it illegal, while the EU, the US, the UK, Germany and France all expressed support for Spanish unity.
  • EU faces danger of "more cracks" appearing in bloc
  • The case for and against independence
  • Reality Check: Police violence in Catalonia
Meanwhile Spanish prosecutors say they will file charges of "rebellion" against Mr Puigdemont next week.

What's the reaction been?

Thousands celebrated the declaration of independence on the streets of Barcelona, Catalonia's regional capital.
As the outcome of the vote became clear, people popped open cava, the local sparkling wine.
The same crowds that cheered each Yes vote from Catalan MPs were reportedly booing Mr Rajoy as he made his announcement.
There have been pro-unity demonstrations too, with protesters in Barcelona waving Spanish flags and denouncing Catalan independence.

How did we get here?

After the 1 October referendum, Mr Puigdemont signed a declaration of independence but delayed implementation to allow talks with the Spanish government.
He ignored warnings by the Madrid government to cancel the move, prompting Mr Rajoy to first announce his plans to remove Catalan leaders and impose direct rule.
Catalonia is one of Spain's richest, most distinctive regions with a high degree of autonomy.
But many Catalans feel they pay more to Madrid than they get back, and there are historical grievances, too, in particular Catalonia's treatment under the dictatorship of General Franco.
Catalans are divided on the question of independence - an opinion poll earlier this year said 41% were in favour and 49% were opposed to independence.
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