Apple's tax ruse is astonishingly cynical

Remember when Apple was as fresh, green and wholesome as the fruit it’s named after? I don’t really either, but the most recent news — reported in today’s Times — that Apple is "pursuing the holy grail of tax avoidance" by setting up subsidiaries that are not based in any country is quite astonishingly cynical. 

According to the report, one subsidiary called Apple Operations International has no employees or offices anywhere. It’s certainly a creative solution — but when developing countries lose eight times more to tax evasion than they receive in aid ($385bn according to DFID) and the UK tax gap is estimated at £30bn, the creative minds behind the tax ruse ought to be using their skills elsewhere.

The concept of not registering in any country at all is an interesting one, and something I’ve been researching when it comes to wealthy individuals. Projects like "The World" — a globe-crossing luxury boat containing 165 private residences so that ‘home’ is wherever ‘The World’ is — loosen the ties that usually exist between an individual and a particular country (and their inland revenue.) 

Last year, 1800 Americans gave up their US citizenship. While some renounced their US citizenship for political reasons (often because they object to US foreign policy), a large proportion did so for tax reasons. The US is one of only four countries in the world (the others are the incongruous gang of North Korea, The Philippines and Eritrea) that tax their citizens regardless of where they are living. Most other countries tax individuals on the basis of residence. 

The vast majority of Americans who have expatriated have taken up a second nationality instead, but the US is also unusual in that gives citizens the option of becoming stateless ie. having no nationality at all. There are an estimated 12 million stateless people in the world — people who often face grave difficulties, including a lack of access to state welfare, education or healthcare or travel documents. But a handful of people are known to have become stateless voluntarily.

I’ve spoken to one of them, and next issue I’ll be exploring whether the rich will consider statelessness as a radical way to avoid tax.

Photograph: Getty Images

Sophie McBain is a freelance writer based in Cairo. She was previously an assistant editor at the New Statesman.

Getty Images.
Show Hide image

Tory Brexiter Daniel Hannan: Leave campaign never promised "radical decline" in immigration

The voters might not agree...

BBC Newsnight on Twitter

It was the Leave campaign's pledge to reduce EU immigration that won it the referendum. But Daniel Hannan struck a rather different tone on last night's Newsnight. "It means free movement of labour," the Conservative MEP said of the post-Brexit model he envisaged. An exasperated Evan Davis replied: “I’m sorry we’ve just been through three months of agony on the issue of immigration. The public have been led to believe that what they have voted for is an end to free movement." 

Hannan protested that EU migrants would lose "legal entitlements to live in other countries, to vote in other countries and to claim welfare and to have the same university tuition". But Davis wasn't backing down. "Why didn't you say this in the campaign? Why didn't you say in the campaign that you were wanting a scheme where we have free movement of labour? Come on, that's completely at odds with what the public think they have just voted for." 

Hannan concluded: "We never said there was going to be some radical decline ... we want a measure of control". Your Mole suspects many voters assumed otherwise. If immigration is barely changed, Hannan and others will soon be burned by the very fires they stoked. 

I'm a mole, innit.