Both Apple and Ireland “played by the rules”, he told the publication.
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Apple has said it plans to appeal against the decision.
“The rulings endorsed a way to establish the taxable profits for two Irish incorporated companies of the Apple group (Apple Sales International and Apple Operations Europe), which did not correspond to economic reality: nearly all sales profits recorded by the two companies were internally attributed to a head office”, the statement further said.
Margrethe Vestage, the top competition official for the European Commission, the EU’s executive body, said the deal amounted to illegal state aid to Apple from Ireland. Doing it this way doesn’t seem like the right approach to me. “No one did anything wrong here and we need to stand together.this is unacceptable”.
He told the paper the 0.005 per cent rate it is accused of paying the Commission is a “false number”, saying: “They just picked a number from I don’t know where”. It is not true.
Apple was found to be holding over $US181 billion in accumulated profits offshore, more than any U.S. company, in a study published past year by two left-leaning non-profit groups, a policy critics say is created to avoid paying USA taxes. Cook did not say whether the company would now pay those full taxes on whatever cash is repatriated.
Apple Sales International made research payments totalling $2bn to its parent, Apple Inc, in 2011, which significantly increased in 2014, the Commission said.
Apple is under fire over allegations it pays little in taxes in Ireland, a country with a low corporate tax rate (12.5%). And he added that Apple pays $1 out of every $15 of corporate tax collected in Ireland.
Apple still planned to go ahead with an expansion in Cork, he said.
White House spokesman Josh Earnest said USA taxpayers could ultimately bear the brunt of the decision, if Apple is forced to make the payment, because the company then could deduct the billions it pays Ireland from the US taxes it owes. “We believe we’re the largest taxpayer there”.
CEO Tim Cook gestures to the audience as he closes the company’s World Wide Developers Conference keynote in San Francisco, California, U.S., June 13, 2016.
Speaking from California, Cook told the broadcaster that the company has provisioned “several billion dollars” for tax when profits are repatriated. Doing it this way doesn’t seem like the right approach to me.
“In 2014 our worldwide income tax rate was 26.1%”, Mr Cook added. “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 EU, leading the way in the fight for tax justice, has shown that no one is above the law”.
But Vestager said the numbers were obtained from Apple itself, while others dating from 2011 came from USA hearings. “There is no reason for it in fact or in law”, he said. In a public letter to Apple customers on August 30, Cook wrote: “We are committed to Ireland and we plan to continue investing there, growing and serving our customers with the same level of passion and commitment”.
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Apple said on Tuesday that the decision would be harmful for jobs. Cook also sounded confident that the Irish government will appeal the ruling.
