In a separate interview with the Irish Independent, Mr Cook branded Commissioner Margrethe Vestager’s ruling “political crap”.
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“The tax treatment in Ireland enabled Apple to avoid taxation on nearly all profits generated by sales of Apple products in the entire European Union single market”.
The European Union wants to crack down on the ways that companies minimize their tax bills in Europe, especially in Ireland.
Tim Cook’s claim: “No one did anything wrong here”. Apple and its low tax bills have suddenly become an avatar of United States interests, and there is already speculation that Facebook could be the next tech giant to be targeted by European regulators.
The Irish government plans to contest the ruling and Apple CEO Tim Cook has condemned the commission’s decision, saying it could risk investment and job creation in Europe.
The Government still has not decided if it will appeal the Apple ruling. It is a not-so-subtle reminder of how their fortunes are interlinked ahead of the crucial Cabinet meeting on Friday.
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.
Vestager had said Apple’s tax rate on its profits was only 0.05 percent in 2011 and 0.005 percent in 2014. In the year that the Commission says we paid that tax figure, we actually paid $400m.
The investigation found that Apple routed nearly all the taxable profits from European sales to two Irish-based subsidiaries, which shifted the money to a “head office” that had no employees or facilities and was not taxed in any country.
Instead, much of the profit was attributed to an offshore head office, which BBC Business Editor Simon Jack describes as the “tax equivalent of outer space”. Here is the truth: “in that year we paid $400m to Ireland and that was based on the statutory rate of 12.5 per cent”.
“We believe that makes us the highest taxpayer in Ireland that year”. It is by far the largest anti-competition penalty imposed on a company by the EU. But the question is whether it is paying its fair share. “We haven’t done anything wrong and the Irish government hasn’t done anything wrong”.
He also criticized the retrospective nature of the order, which covers alleged unpaid taxes from 1993-2001. If you taxed all $22bn at 12.5%, it would owe more like $2.75bn.
Mr Cook: “Ireland is being picked on and this is unacceptable”.
“We are completely committed to Ireland”. It made a similar ruling against Starbucks and Fiat in the Netherlands a year ago, and has used state-aid laws to launch ongoing investigations into Amazon and McDonald’s in Luxembourg.
Investigations are continuing into whether Luxembourg’s tax treatment of McDonald’s and Amazon also amounted to illegal state aid. We didn’t go there to seek advantage on taxes.
This certainly seems to be the case.
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But De Simone said Apple has also kept more than $200 billion in accumulated profits offshore.
