As a penalty for this action, the European Union ordered Apple to pay approximately $14.5 billion in unpaid taxes to Ireland. He said Ireland was being “picked on”, even as he continued to push plans for expansion in country (See: EC orders Apple to pay 13 bn in taxes plus interest to Irish government over illegal profit routing).
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But the companies, industrial and tech titans like Apple, Microsoft, General Electric and Pfizer, also say they are waiting for Washington to cut corporate tax rates to reasonable levels before they repatriate the funds.
Apple CEO Tim Cook has said the recent European Commission ruling that it should pay €13 billion in back taxes to the Irish Republic as “maddening” and not based in law.
Is the EU’s £11bn tax bill for Apple fair?
“We were certainly one of the largest corporate taxpayers in Ireland that year, if not the largest”, the company added. If we’re honest, we’ve only begun to change them because of external pressure from the likes of the OECD, political outcry in the United States, and the effect on public opinion of tax-related wiki leaks. Shame on Apple for dodging USA taxes.
Maybe it can be argued that was all in the past and that we are adapting to new standards of tax morality at the same pace as the Americans, the French, the Dutch and other Western jurisdictions that are quick to throw stones but whose own tax glasshouses have also been less than transparent over the years.
Now the companies say they are ready to pay taxes on the money in the United States, just not at the current rate the U.S. government would assess. “We have been working for years now to try and find a way forward with tax reform that rationalizes our system”.
But with the piles of profits mounting offshore, tax activists say the companies are simply holding out for another tax holiday, and that the rules on taxation need to be reformed.
US Treasury Secretary Jacob Lew today reiterated the Obama administration’s frustration with European authorities over their decision this week to impose back taxes on Apple.
Online retailer Amazon.com Inc (AMZN.O), for example, declined to comment on an European Union investigation of the tax treatment of royalties paid by a Luxembourg unit.
The Commission said: “The Commission’s investigation has shown that the tax rulings issued by Ireland endorsed an artificial internal allocation of profits within Apple Sales International and Apple Operations Europe, which has no factual or economic justification”.
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The EU pointed out that the ruling does not question Ireland’s existing corporate tax rate of 12.5%.
