Nevertheless, the Jersey Financial Services Commission, as well as the States, have said they wish to investigate the dealings of Esplanade-based law firm Appleby, whose documents – exposed after the company was targeted by hackers last year – have revealed details of the deals used by conglomerates and wealthy individuals to reduce their tax bills.
And the Chief Minister’s Department and Jersey Finance chief executive Geoff Cook have both also said that companies must demonstrate they have economic ‘substance [are carrying out business] here’, if they wished to claim Jersey tax residence.
This week, investigative journalists released details of the Paradise Papers data leak, in which 13.4 million documents revealed the offshore financial dealings of wealthy individuals and multinational companies.
Appleby, which has a substantial presence in Jersey, admitted that it was hacked last year and reportedly had more than six million documents stolen.
The BBC’s Panorama programme and the Guardian newspaper claimed that US tech giant Apple received advice from Appleby about relocating two subsidiaries to Jersey, helping it to avoid tax on $252 billion in cash that it holds offshore.
A BBC report claimed that the subsidiaries, Apple Operations International and Apple Sales International, were managed from Appleby’s Jersey office from the start of 2015 until early 2016.
The JFSC and the States have called for the International Consortium of Investigative Journalists, which is spearheading the investigation, to hand over its documents relating to Appleby, so they can launch their own investigation.
However, John Harris, director-general of the JFSC, said that the companies were not officially registered in the Island and that no evidence had been provided that any of Apple’s cash had moved to Jersey.
‘We can confirm that the two Apple subsidiaries referred to by the media are not Jersey-registered companies and our understanding is that Apple funds relating to these entities have not been remitted to or held in the Island,’ he said.
‘The JFSC has not seen any of the documentation that the ICIJ claims to hold following the Appleby data breach. If the ICIJ possesses data of a criminal or regulatory nature which relates to business activities in Jersey, then we would request that this information is shared with us and, if there is any evidence of wrongdoing, then we will investigate and take action if appropriate.’
He added: ‘We expect all regulated firms in Jersey to comply with the standards that we set and to report any level of activity that falls outside of those standards. If we find evidence of any non-compliance with these standards, then we will take action accordingly.’
Meanwhile, a spokeswoman from the Chief Minister’s Department said that a ‘substance test’ may need to be introduced in Jersey to determine whether firms were actually carrying out business here.
‘Jersey does not want abusive tax avoidance schemes operating in the Island and expects financial services providers to abide by a voluntary code to say they will not take on this kind of business,’ she said.
‘If this proves to be such business, we will consider how to strengthen our arrangements – if necessary by amending our legislation to introduce a substance test. It is not satisfactory for a foreign-registered company to claim tax residence in Jersey without demonstrating a substance here.
‘These allegations will be investigated and we are asking the ICIJ to provide all relevant documents to support this action.’
