‘No one did anything wrong here and Ireland is being picked on... It is total political crap’ - Apple chief Tim Cook
In an exclusive interview, Apple boss Tim Cook tells Adrian Weckler why he thinks politics is at play
Published 01/09/2016 | 02:30
Apple chief executive Tim Cook has angrily dismissed Brussels' tax accusations as "political crap", suggesting that Ireland is being "picked on" and is a pawn in a wider European Commission agenda to harmonise taxes across the EU.
In an exclusive interview with today's Irish Independent, Mr Cook also said that Apple will "go forward" with an expansion in Cork, despite misgivings over future investment across Europe.
He said he would "love" to see the Government launch an appeal against the ruling.
"I think we'll work very closely together, as we have the same motivation. No one did anything wrong here and we need to stand together. Ireland is being picked on and this is unacceptable."
Mr Cook strongly rejected the assertion by European Competition Commissioner Margrethe Vestager that Apple paid just 0.005pc tax in Ireland in 2014.
"It's total political crap," he said.
"They just picked a number from I don't know where. In the year that the Commission says we paid that tax figure, we actually paid $400m. We believe that makes us the highest taxpayer in Ireland that year."
On Tuesday, the European Commission ruled that Ireland illegally provided state aid to Apple by not collecting €13bn of taxes owed to it by the tech giant over a 10-year period. Ms Vestager said that Apple had improperly routed taxable income to a subsidiary with no accountable head office.
However, Mr Cook said that Apple and Ireland had "played by the rules" and would win the case on appeal.
In the meantime, he said that the EU’s tax ruling is set to cause serious trade and the US.
“This is a huge overreach that represents retrospective activity and is completely unfair,” he said. “It’s wrong.In the last several years, we’ve had political differences of opinion in the US on this.
But on this one, literally 100pc of the comments are in agreement.”
And he said that “politics at play” was the basis of Apple being targeted by the European Commission.
“I can’t see another explanation for it,” he said.
“This conclusion that the Commission has reached has no basis in law or in fact. So I think it clearly suggests that this is politics at play.”
Mr Cook said that the European Commission may be trying to use state aid laws to alter the tax system possibilities too, but I think it’s clear that there is a desire to harmonise tax rates across the EU. Doing it this way doesn’t seem like the right approach to me. There should be a public discussion about it.”
Mr Cook agreed with the US government finance minister, Jack Lew, that the “retroactive” €13bn tax bill was an attempt by the EU to grab taxes owed to the US treasury.
“I think that’s exactly what it is,” he said. “I think it’s a desire to reallocate taxes that should be paid in the US to the EU.”
Asked whether he believed that the ruling against Apple reflected anti-US company sentiment in the European Union, Mr Cook said that this was “one reason” why the company was targeted in the EU tax ruling.
“I think that Apple was targeted here,” he said.
“And I think that (anti-US sentiment) is one reason why we could have been targeted.
“People in leadership positions in several countries tell me that this is the agenda. I don’t know where that comes from. But what I feel strongly about is that this decision was politically based, of that I’m very confident. There is no reason for it in fact or in law.”
Mr Cook also defended Apple’s global tax expenditure.
“At a worldwide level, Apple pays income tax of 26.1pc,” he said. “Some people would say that that should be higher and some might say it should be lower.
“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.”
“This is like playing a basketball game where you score a couple of threepointers and later someone tells you they were actually just two-pointers.
“It’s patently unfair and not what you expect from a developed country that has a history of rule and law.”
Regardless of the company’s current European challenges, Apple is to press ahead with expansion in Cork, he said.
“We are going forward, absolutely,” he said. “I want to be really clear that we are very committed on Ireland.
“We are going to continue with the expansions we talked about.”
Apple recently gained planning permission for extra space in Cork that is aimed at housing more workers at the company’s facilities there.
“We’ve been spending a lot of money on building out a large location in Cork,” said Mr Cook.
“We have a 37-year-old marriage with Ireland and it means something to us.
“It’s a very deep relationship. Every time I go there it brings me such joy. It is an integral part of the company.
“I feel like Ireland stuck with Apple when it wasn’t easy to stick with Apple and now we’re sticking with Ireland.”
Speaking about the company's relationship with Ireland on RTE's Morning Ireland, Cook used the analogy of a '37-year old marriage'.
"We now have 6,000 people. That was only possible because of the Irish people, both welcoming us to the community and growing with us and we’ve had good times and we’ve had some challenging times," he said.
"When I first came with the company in 1998 Apple wasn’t doing good. Steve (Jobs) had just come back and we were on the verge of bankruptcy frankly, probably within weeks of it.
"I remember going to Ireland very shortly after I had joined the company and as I was travelling, although I didn’t tell people at the time, we sort of felt we had to close the site and I got there and started really understanding what we had there.
"The people of course is really what I’m talking about.
"Together Ireland and Apple are thriving, that’s the way I look at this relationship, it’s a 37-year old marriage and like any marriage you go through a pothole here and there but we stuck together.
"We stuck together because we’ve always felt so close to the people there and the community there."
Cook also described the ruling as “maddening and disappointing”.
The Apple boss went on to say the European Commission’s decision came from a political place and that it had no basis in fact or law.
“We’re subject to the statutory rate in Ireland of 12.5pc, we paid $400m in taxes in 2014. We believe we’re the largest taxpayer there,” he said.
The head of the Cupertino giant also denied allegations of ever having a special deal with the Irish Government and said his company were treated like any other in Ireland.
Cook also said the 0.005pc tax rate it is accused of paying the Commission is a “false number”.
“I have no idea where the number came from. Here is the truth, in that year we paid $400m to Ireland and that was based on the statutory rate of 12.5pc.”
The Apple chief remains confident that the Government will choose to oppose the ruling and also said the company’s commitment to Ireland hasn't waned.
“It has not been diminished one iota, we are completely committed to Ireland. We view the team there is world-class. They do such incredible work for Apple and we’re moving forward with the planned investments,” he said.
Read Technology Editor Adrian Weckler's full interview with Tim Cook in today's Irish Independent