Cook said he would fight closely with Ireland to overturn the ruling wherein Apple has been asked to pay Ireland 13 billion euros in back taxes.
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The European Commission estimates that in 2014, one of Apple’s Irish affiliates paid a tax rate of just 0.005% on its Irish profits.
“Retroactive taxes not based in the rule of law are an attack on all US companies doing business globally”, Portman said. While this is not illegal in and of itself, such moves have become controversial in both the United States and Europe, though the USA criticized the EC’s findings of fact and intent to require Apple to pay up. US corporate tax information is private, so there is no way for Apple to say for sure that it is the biggest taxpayer in the country, much less the world.
The EC ruled on Tuesday that Ireland gave Apple illegal tax benefits by not collecting €13 billion ($14.5 billion) in taxes owed to it over a 10-year period.
US companies are supposed to pay federal taxes on their global profits, but the tax on money made overseas is only due when it’s brought back to the U.S.
The country’s official corporate tax rate is 12.5 per cent meaning Apple has effectively been paying just €50 in tax for every €1 million earned in profit. “Right now the ball is in the hands of Apple and Ireland”, comments the Commissioner. But Apple has also long suggested it wasn’t considering moving any of that money back soon-until there was corporate tax code changes in the us that would make such a move less costly. “I’m convinced that would be crystal clear to anyone looking at this from an unbiased point of view”, Cook said on the radio.
The companies say they want to see a lower U.S. tax rate before the bring it back; now the top rate is 35 percent.
Apple will appeal and Cook believes Ireland will do the same in the interests of protecting future inward investment. If Ireland wants to create rules that allow for stateless entities not to pay taxes anywhere, up until now that has been Ireland’s decision to make. Ireland essentially allowed Apple to pay substantially less tax than other companies. Instead of recording the profits generated by its European Union businesses directly to those business segments (Apple Sales International and Apple Operations Europe), Apple attributed them to a “head office” that existed only on paper and did nothing to generate the revenues assigned to it.
Cook told the newspaper that bias against multinationals from the United States may have been a factor in the decision to impose the bill.
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Ms Kroes is also critical of the retrospective nature of the ruling, which determined that Apple had underpaid its Irish taxes from 2003 until 2014, saying a fundamental principle of tax law is that changes do not apply to past years.
