In 2014, after Ireland’s tax arrangements with Apple were ruled illegal under EU rules on state aid, documents obtained by the International Consortium of Investigative Journalists (ICIJ) from law firm Appleby suggest Apple began to look for a new low tax jurisdiction in which to set up holding companies.

The ICIJ says Apple’s advisers at US law firm Baker McKenzie, canvassed Appleby about the options. A questionnaire that Baker McKenzie emailed in March 2014 set out 14 questions for Appleby’s offices in the Cayman Islands, the British Virgin Islands, Bermuda, the Isle of Man, Guernsey and Jersey.

One asked that the offices: ‘Confirm that an Irish company can conduct management activities . . . without being subject to taxation in your jurisdiction.’

According to the ICIJ, Apple also asked for assurances that the local political climate would remain friendly: ‘Are there any developments suggesting that the law may change in an unfavourable way in the foreseeable future?’

In the end, Apple settled on Jersey, which the ICIJ claims went on to play a significant role in Apple’s newly configured Irish tax structure set up in late 2014. Under this arrangement, the tech supplier has continued to enjoy low tax rates on most of its profits and now holds much of its non-US earnings in a $252bn offshore cash mountain. 

ICIJ reported that an Apple spokesperson declined to answer a list of questions about the company’s offshore tax strategy, except to say it had informed US, Irish and European Commission regulators of its reorganization at the end of 2014.

The spokesman said: ‘The changes we made did not reduce our tax payments in any country.

‘At Apple we follow the laws, and, if the system changes, we will comply. We strongly support efforts from the global community toward comprehensive international tax reform and a far simpler system, and we will continue to advocate for that.’

At a tech event in Lisbon this week Margrethe Vestager, the European competition commissioner, said she was taking another look at Apple’s tax affairs.

Vestager said the move pre-dated the Paradise Papers revelations, and followed on from the EU ruling in 2016 that Ireland should collect €13bn (£11.5bn) in back taxes.

‘I have been asking for an update on the arrangement made by Apple, the recent way they have been organised, in order to get the feeling whether or not this is in accordance with our European rules,’ she said.

Vestager said she would also be pressing the Irish government about the timeframe for claiming the repayment, which has been delayed while both parties take legal action.

‘We have no indication when it comes to the time perspective in recovering the unpaid taxes from Apple.

‘We do have from the Irish government the progress made when it comes to figuring out how to deal with such amounts of recovered taxes. I respect the complexities of how to keep €13bn while the court case takes place.

‘But we need to see progress when it comes to making the recovery because we have seen that the Belgians have done it, the Dutch have done it and Luxembourg has done it in terms of recovery. Because of equal treatment, we expect the Irish to do it,’ she said.

Report by Pat Sweet