Apple CEO Tim Cook calls EU tax ruling 'total political crap,' cites potential anti-US sentiment
Apple CEO Tim Cook called the European Commission's recent ruling that left his company saddled with a 13 billion ($14.5 billion) tax bill "total political crap" in an interview published Thursday, suggesting Apple was targeted in the European Union probe.
According to Cook, the ruling was potentially motivated by anti-U.S. sentiment on the part of the EU, reports the Irish Independent.
"I think that Apple was targeted here," Cook said. "And I think that (anti-US sentiment) is one reason why we could have been targeted. People in leadership positions in several countries tell me that this is the agenda. I don't know where that comes from. But what I feel strongly about is that this decision was politically based, of that I'm very confident. There is no reason for it in fact or in law."
Cook also agreed with comments made by U.S. Secretary of Treasury Jack Lew, who said the tax ruling is a blatant grab at taxes owed to the U.S. government.
"I think that's exactly what it is," Cook said. "I think it's a desire to reallocate taxes that should be paid in the U.S. to the EU."
On Tuesday, Apple was ordered to pay $14.5 billion in back taxes plus interest for accepting illegally low tax rates in Ireland over the past ten years. The penalty, the largest ever handed down by the EU's executive body, was the result of an investigation into Apple's "Double Irish" tax loophole that allowed the company to route European profits through two Irish subsidiaries.
The benefit, according to the commission, was effective tax rates of 0.005 percent in 2014 and 1 percent in 2003. As the figures are not in alignment with Ireland's standard tax rate of 12.5 percent, the country is being accused of providing Apple illegal state aid.
"They just picked a number from I don't know where," Cook said. "In the year that the Commission says we paid that tax figure, we actually paid $400m. We believe that makes us the highest taxpayer in Ireland that year."
Apple and Ireland disagree with the commission's decision and have lodged a formal appeal.
Cook believes the commission is taking advantage of the situation in an effort to harmonize tax rates across the EU. By overstepping its granted authority, the EU is jeopardizing amicable trade relationships between member states and the U.S., he said.
The comments closely align with an open letter Cook penned to European customers. In it, the Apple chief says his company pays its fair share of taxes in all jurisdictions, and stresses it did not ask for or receive special privileges in Ireland.
Despite the kerfuffle, Cook affirmed Apple's commitment to Ireland, saying it has no intention of scrapping planned investments in the region. Last week, Apple got the green light to add 1,000 jobs at its headquarters in Cork, a project that calls for the construction of a new office block and supporting amenities. Prior to that, the company recently received approval to build the first phase of a data center in the town of Athenry in County Galway.
"We've been spending a lot of money on building out a large location in Cork," Cook said. "We have a 37-year-old marriage with Ireland and it means something to us. It's a very deep relationship. Every time I go there it brings me such joy. It is an integral part of the company."
Both the Cork expansion and upcoming data center buildout, the latter of which could take 10 to 15 years to complete, are expected to move forward.
"I feel like Ireland stuck with Apple when it wasn't easy to stick with Apple and now we're sticking with Ireland," he said.
According to Cook, the ruling was potentially motivated by anti-U.S. sentiment on the part of the EU, reports the Irish Independent.
"I think that Apple was targeted here," Cook said. "And I think that (anti-US sentiment) is one reason why we could have been targeted. People in leadership positions in several countries tell me that this is the agenda. I don't know where that comes from. But what I feel strongly about is that this decision was politically based, of that I'm very confident. There is no reason for it in fact or in law."
Cook also agreed with comments made by U.S. Secretary of Treasury Jack Lew, who said the tax ruling is a blatant grab at taxes owed to the U.S. government.
"I think that's exactly what it is," Cook said. "I think it's a desire to reallocate taxes that should be paid in the U.S. to the EU."
On Tuesday, Apple was ordered to pay $14.5 billion in back taxes plus interest for accepting illegally low tax rates in Ireland over the past ten years. The penalty, the largest ever handed down by the EU's executive body, was the result of an investigation into Apple's "Double Irish" tax loophole that allowed the company to route European profits through two Irish subsidiaries.
The benefit, according to the commission, was effective tax rates of 0.005 percent in 2014 and 1 percent in 2003. As the figures are not in alignment with Ireland's standard tax rate of 12.5 percent, the country is being accused of providing Apple illegal state aid.
"They just picked a number from I don't know where," Cook said. "In the year that the Commission says we paid that tax figure, we actually paid $400m. We believe that makes us the highest taxpayer in Ireland that year."
Apple and Ireland disagree with the commission's decision and have lodged a formal appeal.
Cook believes the commission is taking advantage of the situation in an effort to harmonize tax rates across the EU. By overstepping its granted authority, the EU is jeopardizing amicable trade relationships between member states and the U.S., he said.
The comments closely align with an open letter Cook penned to European customers. In it, the Apple chief says his company pays its fair share of taxes in all jurisdictions, and stresses it did not ask for or receive special privileges in Ireland.
Despite the kerfuffle, Cook affirmed Apple's commitment to Ireland, saying it has no intention of scrapping planned investments in the region. Last week, Apple got the green light to add 1,000 jobs at its headquarters in Cork, a project that calls for the construction of a new office block and supporting amenities. Prior to that, the company recently received approval to build the first phase of a data center in the town of Athenry in County Galway.
"We've been spending a lot of money on building out a large location in Cork," Cook said. "We have a 37-year-old marriage with Ireland and it means something to us. It's a very deep relationship. Every time I go there it brings me such joy. It is an integral part of the company."
Both the Cork expansion and upcoming data center buildout, the latter of which could take 10 to 15 years to complete, are expected to move forward.
"I feel like Ireland stuck with Apple when it wasn't easy to stick with Apple and now we're sticking with Ireland," he said.
Comments
As a life-long Apple evangelist, even I find this Apple hard to swallow.
Next thing you know, the European commission will want Apple to subsidize Greece and Spain.
The Department of Justice should punish Europe for this misadventure by prosecuting Volkswagen more aggressively - to the tune of a $75 BILLION fine. Currently they are handing Volkswagen with kid gloves. But with this turn of events, this should greenlight a big stick punishment that would push Volkswagen to bankruptcy. Take that Europe.
The Irish government as present has not yet appealed - the finance minister stated his intention to but is currently struggling to garner enough support within the government to push it through. Indeed the people of ireland are not looking on this favourably after suffering years of cut-backs and austerity to find the government giving sweetener deals to large multinational companies and possibly REFUSING billions in backdated tax which could pay for schools, housing, hospitals etc. etc.
https://www.ft.com/content/2af3003c-6f6c-11e6-a0c9-1365ce54b926
To an outsider, the United States appear more and more xenophobic with each passing day. If Trump succeeds, I can see USA becoming more like North Korea or to a lesser extent, a mini Russia.
The above part is complete and utter BS. Yes, Apple and Ireland made agreements on the amount of tax that Apple would have to pay if they'd choose to use Ireland as their Eu-base of operations. But in no way is that tax owed to the US government. Technically it's not owed to anyone since there's an agreement. But even íf there's tax owed to anyone, then Ireland and Apple need to specify what amount of profit/income was made based on EU-sales. Because there's no way that áll of the taxes made in Ireland, are owed to the US government.
Having said that: I despise the EU for charging outrageous taxes like that. Ireland made a deal with Apple to improve Ireland's economy. That was done befóre the EU made a vow to stop tax-deals in the EU. If the EU implements these plans after Ireland's deal with Apple, they need to take it up with Ireland. Apple shouldn't be involved or punished for political turbulence (in the EU in this case).
I despise the EU, even more so because of how they try to punish companies for deals made with countries. But I think Apple is completely missing the point here. Just because you paid 400mil in taxes doesn't mean you're paying a proper amount. 0,005% is still 0,005%, and not the norm for most other companies in Ireland. And the US government certainly doesn't have any right to taxes made by products sold to EU citizens.
I also run a business in California and pay 12-13% in taxes. I do not have the legal power to look for loopholes in the tax legislation that would allow me to launder my money through Ireland.
It's disappointing that Tim Cook doesn't appear to know the difference between what is legal and what is ethical.
It wasn't long ago that homosexuality was illegal in the United States. Would Mr. Cook have modified his personal life to abide by these laws or would he consider them unethical?
And as for the anti-US sentiment, I call total bullshit... and a shame that he would pull this card at a time when countries in Europe are being hit by terrorist attacks.
Pay the fine and stop protesting your innocence. It makes Apple look really, really bad.
And it makes me wonder if Apple's work to "improve the rights of foreign workers" or to "protect the environment" are only being pursued because it is to Apple's fiscal advantage.
If it matters, I was born and raised in Ireland, have an Apple tech business and a sister I love who was recently married to her longtime female partner.
With all that sh*t going on, you'd think I'd be able to swing a better tax deal.
There is a huge amount of opposition to exit from the EU in Great Britain, so much so that the Prime Minister is shying away from a Parliamentary vote (which has raised constitutional issues), likely because a motion to invoke Article 50 won't pass.
Where did you pull this from?
Ireland set its tax laws and Apple abided by them and greatly benefitted the country in the process.
The most Ireland can do now is change their law but asking for back taxes is pure bullshit
Fuck the companies that choose to pay 20% when 12% and lower is available them in Ireland.
If these companies are too stupid or too lazy to take advantage of it then I say fuck them. This is a competitive global economy and the EU is clearly not ready for it.
The US government and American companies should target the EU back, hit them hard enough to get them dissolved. To hell with any consequences to be fixed later.
The EU is an ill conceived organization managed by idiots that should not exist. The world would be better without them.
Sorry Tim, your hands are slick with red stuff.
The EU is not ready for the global economy and should be dissolved.
What the fuck do they think this is? A Socialist World?
For the slower witted who find Cook's comments confusing or outrageous, this is because y'all ignorant of the finer details, and go shooting your fool mouths off like moralizing Puritan zealots, before learning a single thing past your lizard brain reflex.
This is Irish tax law, and Apple has fully complyied with it. This is also a long standing practice, and the EU hasn't said a peep about this since the mid 1980s? Fishy, considering Tim Cook has been meeting with both Democrats and Republicans, while talking about finding a way toward patriating those foreign earnings.
Translation for the still confused, angry and dim: US tax code is broken, and foreign revenue is essentially taxed twice, the second at an outrageous level. Apple's been working to reform that and get foreign assets home to the US, so pretty obvious Cook thinks the EU timing is suspicious (psssst... its been over 30 years). Apparently the Secretary of the US Treasury said all this first. Hardly controversial, unless of course you've replaced rational thought with poorly thought out, collectivist dogma.
What goes around, comes around!
If a certain entity is going to treat another entity unfairly, then it is only natural that the offended entity retaliate, and reciprocate the favor.
The EU has become a huge, greedy beast, overriding the decisions taken and made by its members, members that are supposed to be sovereign states.
What the hell did the Irish revolt against the British for? It seems like it was a complete waste of time, effort and lives, especially seeing how easily they now have surrendered their freedom away.
The Irish have apparently lost their sovereignty, and they're now ruled by a few corrupt fat cats in Brussels, Germany and elsewhere, and the authoritarian globalists didn't even need to employ any troops or blitzkrieg tactics, in order to achieve their goal.
If Apple ever has to pay a penny towards this embezzlement scheme, then Apple should promptly raise the prices of virtually all Apple products sold in the EU zone by an appropriate amount, no matter how high the percentage is increased, to compensate for any loss.
Oh and it appears that the rules are not imposed now but have existed all along, just that Ireland and Apple found ways to work around them which appear to be illegal according to European laws.
Lets see what will happen. As always there will be a compromise but I think its great that this problem has finally been voiced openly and can only hope the the major countries will agree to close the loopholes!
This is very bad PR for Apple.
1. There is massive opposition to Brexit in Great Britain. Scotland and Northern Ireland overwhelmingly voted to remain, as did the financial powerhouse of greater London.
2. Ireland is not a part of Great Britain and hasn't been part of Britain for 100 years.
Not knowing basic facts, when offering opinion on them, can have a tendency to make one sound like a laughable cretin.
In the end we do need a new tax code most relevant countries that profits are taxed where they are generated. That would solve most of these issues