Friday 30 September 2016

'Intentionally misleading' EC ruling ignored tax data - Cook

Exclusive Part 2 of our interview with the Apple CEO

Published 04/09/2016 | 02:30

Apple chief Tim Cook. Photo: Steve Humphreys
Apple chief Tim Cook. Photo: Steve Humphreys

Apple boss Tim Cook has accused the European Commission of having "ignored" Apple tax data to reach "intentionally misleading" tax conclusions that led to a €13bn back tax ruling.

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In an interview with the Sunday Independent, the Apple CEO said that the European Commission cast aside critical tax considerations to come up with factually wrong decisions about the rate of tax Apple pays in Ireland.

"In addition to $400m Irish tax in 2014, we also paid taxes in the countries where we have the final sale of our product or service," said Cook.

"Those tax rates vary by country because each country gets to select their own rate. In addition to those two taxes... Apple's profits on a worldwide basis are subject to additional US income taxes.

"In 2014, we provisioned several billion dollars for those taxes from the entities in Ireland.

"The Commission totally ignored two out of three of those taxes paid and chose a number other than the $400m."

Last week, Cook described as "political crap" a Commission accusation that Apple only paid 0.005pc tax in Ireland in 2014. He said that Apple's actual tax rate in 2014 was 26.1pc across its global operations.

"The [0.005pc] number is completely false and it is intentionally misleading," he said.

In response, the European Commission's Competition Commissioner, Margrethe Vestager, said that it used tax data that came from Apple.

However, Cook said that Apple was denied aspects of due process during the "political" investigation.

"They didn't share with us their information before the press meeting, we got the release one hour before everyone else got it," he said.

Apple is one of a number of companies criticised for paying too little tax on its annual multibillion euro profits.

However, Cook said that Apple now wants to play "a constructive role" in changing international tax rules.

"I'd be the first to say I hate the tax system," he said. "It should be made simple and straightforward. And Apple wants to play a constructive role in that and we have some ideas. But I think that most people would look at that [26pc] number and say 'yeah, that's about right'.

"They may have a view that it should be allocated differently within the countries we do business in. And these are fair points. But it should be talked about going forward, not retrofitting the law to what they wish it was and then trying to run the game again."

Cook said that Apple would appeal the decision.

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