Defending the European Commission (EC) tax ruling against Apple, EU President Jean-Claude Juncker has termed the decision as “landmark” that was taken “without discrimination and without bias”. This was due to Apple’s decision to record all sales in Ireland rather than in the countries where the products were sold, the EC noted.
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‘Apple has always been about doing the right thing, never the easy thing’.
The company reported in 2014 an effective tax rate of 26.1% on its world-wide profit, including the foreign tax provisions that are unpaid, a level Mr. Cook described as “reasonable”.
They ordered that Apple pay what it believed was the proper amount owed without Irish “state aid”. Cook has complained in the past that high United States taxes have discouraged the company from bringing those earnings home.
Here is how the whole situation unfolded:1.
Several lawmakers have questioned such a move, given that the tax penalty is equivalent to what the country pays annually to fund its national health care system.
Stiglitz added that the European Union’s massive bill to Apple also serves as a “fair warning” to other companies looking to duplicate what Apple has done in Ireland.
The Commission alleges that arrangements the government offered Apple AAPL, +0.59% in 1991 and 2007 allowed it to pay around 1% to nearly zero tax on its European profit between 2003 and 2014. Cook has already hinted that the company may bring some of its “war chest” cash back to the U.S. next year, allowing the company to spend more on R&D, but also meaning that money will be taxed by the USA government.
(Photo JOHN THYS/AFP/Getty Images)3.
After a half-hour meeting, the cabinet chose to launch an appeal to the EC’s decision.
Cook says the $400 million was based on Ireland’s 12.5% corporate rate.
Naturally, this caused quite a lot of uproar in Cupertino, with Tim Cook calling this “total political crap”.
According to Reuters, the U.S. treasury is not happy, they blasted the decision saying “it undermines the environment in Europe for worldwide business”.
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Irish twitter reaction was one of annoyance and humour.
