Apple Keeps Billions of Dollars Hidden in Offshore Accounts

November 10, 2017

Even before the release of the Paradise Papers this week, Apple has faced plenty of criticism over the years for exploiting foreign loopholes to avoid paying taxes. The most prominent example of this occurred in 2013 during a Congressional inquiry of CEO Tim Cook. A Senate committee brought in the executive for questioning after they discovered Apple had hidden billions in taxable income through a series of “ghost companies” in Ireland. Cook admitted nothing, however, telling legislators, “We don’t depend on tax gimmicks. We don’t stash money on some Caribbean island.”

While that second statement appears to be true, it’s only because Apple didn’t have to look for any tropical locales to stash their cash. In fact, they didn’t even need to leave the British Isles once Ireland began to rollback its business-friendly tax policies. In need of a new haven, Apple contacted the Bermudan law firm Appleby for a list of options. The organization specializes in keeping the assets of wealthy clients hidden from governments, business partners, or even spouses. The iPhone-maker eventually decided to use Appleby’s offices in Jersey, a small self-governing island in the English Channel. Along with its tendency not to tax corporate income, Jersey’s close ties with the British financial system made it the ideal candidate.

That is until a team of investigative journalists obtained thousands of documents detailing exactly how Appleby kept money hidden from authorities. Apple’s $128 billion stockpile of overseas cash soon became one of the biggest bombshells revealed in the Paradise Papers, although it’s far from the only big company implicated in the leaks. Nike utilized a similar tax avoidance strategy in Bermuda, even going so far as to stash the trademark rights for its famous “swoosh” logo in an offshore account. Facebook and Uber stored important intellectual property rights overseas as well. All told, tax-dodging strategies like these cost governments across the world a total of $240 billion each year. Only time will tell if the information detailed in the Paradise Papers will convince politicians to tighten up corporate tax loopholes.


  1. Do you think governments should close the loopholes that companies like Apple use to avoid paying taxes?
  2. Will the revelations about Apple’s overseas tax shelters damage the company’s reputation? Why or why not?

Source: Jesse Drucker and Simon Bowers, “After a Tax Crackdown, Apple Found a New Shelter for Its Profits,” The New York Times, November 6, 2017. Photo by C_osett.