“It’s total political crap”, Cook said of the figure.
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“Member states can not give tax benefits to selected companies – this is illegal under EU state aid rules”, said the European competition commissioner Margrethe Vestager.
The EU opinion said Apple had been given €13bn of “prohibited” tax benefits. “There should be a public discussion about it”, he said.
The commission ruled that Apple had received favorable tax terms that amounted to state aid – illegal under its rules.
In addition, he said one of the main issues highlighted by the European Union was that Apple was booking profits from other countries in Ireland but not paying tax on the money. Mr. Cook told The Washington Post in August that the company won’t bring the money back “until there’s a fair rate” but said he was optimistic of corporate tax changes next year. And I think that [anti-U.S. sentiment] is one reason why we could have been targeted. No-one did anything wrong here and we need to stand together.
CEO Tim Cook continued his Irish media offensive on Thursday, giving a 24-minute interview with Ireland’s national radio RTE.
“In Apple’s case, almost all of our research and development takes place in California, so the vast majority of our profits are taxed in the U.S. European companies doing business in the U.S. are taxed according to the same principle”. Further talks are planned before it will make a decision.
Mr Cook said he was “very confident” the ruling would be overturned on appeal.
The EU no doubt sees itself as standing up to big-footed US tech behemoths, but there’s a risk that this strategy could backfire badly, and cause the big four to invest their billions elsewhere. According to the ruling, Apple funneled profits through two subsidiaries, both of which the European Commission said were companies in name only, which allowed Apple to “substantially and artificially” lower its tax burden. I’d be the first to say that the tax system needs to be reformed and that it should be made simple and straightforward. “But it should be talked about going forward, not in a way that retrofits the law to what others wish it was”. “We have created and sustained more than 1.5 million jobs across Europe, follow all laws, and pay taxes”, he added.
“We’re subject to the statutory rate in Ireland – 12.5%”.
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Both the U.S. and European lawmakers filed their complaints, arguing that Apple was receiving an unfair advantage for the jobs the company was creating in Ireland.
