BRUSSELS-A war of words has erupted between Europe’s competition chief and Apple CEO Tim Cook after Ireland was ordered to reclaim €13 billion (£11.1 billion/$14.5 billion) in back taxes from the company.
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“We paid $400m to Ireland, we paid $400 (million) to the USA and we provisioned several billion dollars for the USA for payment as soon as we repatriate it and right now I forecast that repatriation to occur next year”, Cook said.
The EU’s competition commissioner, Margrethe Vestager said, “Tax rulings granted by Ireland have artificially reduced Apple’s tax burden for over two decades, in breach of the EU state aid rules”.
The series of recent European Commission rulings culminating in this week’s Apple decision have made it clear that European leaders recognize this and are set on stopping Irish and other politicians from subverting the tax systems of other European nations – and the United States.
“The European Commission has launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the worldwide tax system in the process”, the company said.
But Competition Commissioner Margrethe Vestager may be tempted to train her fire on European companies after a string of investigations of USA global giants that, especially after Tuesday’s Apple verdict, has enraged the United States.
The Apple boss’s wider point is that the company and Ireland “need to stand together”. They are illegal. I hope that, with today’s decisions, this message will be heard by Member State governments and companies alike, all companies, big or small, multinational or not, should pay their fair share of tax. Vestager said figures used to calculate the amount of back taxes owed by Apple came from the company itself, as well as U.S. Senate hearings.
The report was likewise greeted with anger by USA government officials, one of whom, according to BBC News, was Democratic Senator Charles E. Schumer.
Cook said Apple had paid $800 million in taxes in 2014 on profits, split roughly between Ireland and the U.S. It’s unclear also whether moving those profits back to the U.S. would reduce its Irish taxes.
“We paid 400 million to Ireland, we paid 400 to the United States and we provisioned several billion dollars for the U.S. for payment as soon as we repatriate it and right now I forecast that repatriation to occur next year”, Cook said.
Telling RTE that he “profoundly” disagreed with the decision, Noonan said: “The decision leaves me with no choice but to seek cabinet approval to appeal”.
Had the U.S. adopted stronger laws on overseas taxation, the decision may have been different, the European Union said. But Apple is far from the only American company that established operations in foreign countries to lower its tax bill.
She also rejected Cook’s claim that her decision was politically motivated. In January, the EU Commission, which polices EU rules, unveiled new plans to tackle the problem.
“If my effective tax rate would be 0.05% falling to 0.005%”, she said, “I would have felt that maybe I should have a second look at my tax bill”. Apple has consistently been about doing the right thing.
Vestager said a three-year investigation found Ireland granted such lavish tax breaks to Apple over many years.
Red and green apples of various varieties covered the railings and steps outside the party’s Dublin headquarters following the European Union investigation into the country artificially reducing Apple’s tax burden.
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He went on to call the Commission’s ruling “maddening and disappointing”.
