The company created Irish subsidiaries and attributed billions of dollars of profits made outside the US to them. It then avoided paying large amounts of taxes in the country by making it appear that the subsidiaries were being operated from California. In the US, such a scheme works, because the government allows taxes on income produced by multinational corporations' foreign units to be deferred indefinitely.

In 2013, however, Apple faced inquiries from a US Senate committee that lambasted the company for exploiting a system that saved it billions of dollars in taxes. A year later, the European Union investigated Apple's activities in Ireland and ordered the company to pay $14.5 billion in back taxes. That's the same year Apple first emailed Appleby asking about possible alternative arrangements.

Based on the documents leaked as part of Paradise Papers, Apple asked the Bermuda-based law firm what different offshore jurisdictions, including the British Virgin Islands, Bermuda, the Cayman Islands, Mauritius, the Isle of Man, Jersey and Guernsey, have to offer. When Ireland changed its tax laws in 2015, it gave companies operating out of the country the right to continue with their arrangements until December 2020. That gave Apple enough time to begin processing the change in residency of its two biggest Irish subsidiaries to Jersey, which eliminated corporate taxes (sans some exceptions) in 2008, with Appleby's help.

Why is this such a big deal? Well, Apple said 70 percent of its profits come from outside the US, yet its foreign tax rates typically fall between two to five percent only. In the US, it would have paid a 35 percent tax rate on those profits.

Republican senator John McCain once said:

"Apple claims to be the largest US corporate taxpayer, but by sheer size and scale it is also among America's largest tax avoiders... [It] should not be shifting its profits overseas to avoid the payment of US tax, purposefully depriving the American people of revenue."

Apple, however, defended its practices and its decision, insisting that the move "did not reduce [its] tax payments in any country." It said it decided to hold overseas cash in Jersey, "specifically to ensure that tax obligations and payments to the US were not reduced." Apple explained that it "paid billions of dollars in US tax" to establish its Jersey subsidiary, and that it gets no tax benefit from the change. The company also boasted that it's the biggest taxpayer in the world, and its "worldwide effective tax rate is 24.6 percent, higher than average for US multinationals."

The tech giant also promised to comply with any change in the tax system for multinational corporations in the US in case the administration's tax reform plan goes through. The current proposal suggests cutting multinational companies' taxes to 20 percent from 35 percent, though it will also impose minimum taxes on all foreign earnings and will no longer defer taxes earned by businesses' foreign divisions.

Part of Cupertino's statement reads: