Irish Independent:
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.
Unusually strong words (for him) from Apple’s CEO.
This is the price for being uber-successful.
It doesn’t cost the EU anything to take cheap shots. Sure other firms were targeted in their original probe, but there’s little doubt Apple’s $Billions are the primary target of the investigation/accusations.
Maybe Cook is ready to get serious about the role geopolitics play in the success or failure of big businesses. The government see a big ol’ pile of cash just sittin’ there, and they get hungry for it. Apple’s gotta put that money to work or they risk it being stolen from them by shady politicians.
The EU is starting (?) to stink.
While I agree with Cook on the “political crap” point, he can’t really be that naive about his own business. Corporate tax within Europe ranges from around 20% to around 30%, with far more sales happening in 30% tax regions. Based on the price of e.g. an iPhone leaving China (costing, say, $250) and the sales price in Europe (say $800 and up) there is an enormous profit being generated. And Apple has, for over a decade, not even paid 3% on it. There is no way to twist that.
Of course, Ireland was fine with it and did not ask for more. Not asking for past payments is a matter of reliability, and Apple should not be asked to pay. Our politicians should simply admit that they have done shit to enforce proper tax payments and then change that going forward. A beaurocracy with more seat warmers than Apple has employees should not punish others for its own inefficiency. Makes them look as silly as they are.
The Irish don’t want to collect these taxes because they don’t want to lose the tax haven business. Being in the tax haven game is more valuable to Ireland than the alternative. This ruling is similar to a WTO ruling against illegal tax breaks.
http://www.seattletimes.com/business/boeing-aerospace/wto-panel-to-review-european-claims-of-illegal-tax-breaks-for-boeing-777x/
I really like Apple products, but what they are doing with these tax schemes is just plain wrong. It is wrong morally and it should be wrong legally. Although no one will go to jail because we only reserve that for the poor and the elite.
That a company pays 50 euros worth of tax for every million euros worth of profit is just undefendable. I have lost a lot of respect for Tim Cook.
I’m glad you accept the EU’s (likely falsified) numbers as gospel.
If it is legal, then being asked to pay more taxes for previous years as far back as one decade, this is indeed ‘political crap’.
But isn’t a tax rate of 0.005% ‘political crap’, too? I’d say yes to that. Especially if it is for the most profitable company (in absolute numbers) on the face of the planet.
For sure, this is internal fighting inside the EU. Look at it like this: If all European sales go through Ireland, that means the effective tax rate for Apple in Germany is 0%, from a german perspective. Which again is totally legal apparently, but…
I can see why this is beneficial for Ireland (the investment and jobs do mean a lot for a population of less than 5 million people), but I also see why this raises eyebrows in the rest of the EU.
So is Tim Cook right? – I’d even say this is ‘political theatre’. If the EU wants to change this then go ahead, do it! Change it. If someone ‘plays’ your system, then change the system. Everything else it ‘political crap’ indeed.
Do you pay more taxes than the law requires? Do you send your country’s government “a little extra” because it’s the “right thing to do”? Us working stiffs may be unhappy that Apple doesn’t pay more taxes but they are, just like the rest of us, paying what the law requires. Don’t like that? Don’t blame Apple. Blame the legislators for creating tax code that allows it.
Give me a break they essentially operate a shell company and run all their European profits through it. They are cheating and they are cheating me! As a European they take profits earned in my country and funnel them through their Irish shell company. That is money that could be going to my roads, schools, police, health care system.
“A.O.I., short for Apple Operations International. And this version of Apple is much harder to pin down; it’s something like a quantum corporation whose very nature depends on who is observing it. A.O.I. is, in one sense, huge, among the largest companies that ever existed, with more than two hundred billion dollars in assets. It is also as small as a company can be, with no physical address and no employees. Phillip Bullock, the head of tax operations for Apple, told a U.S. Senate committee in 2013 that “A.O.I. is incorporated in Ireland; thus, under U.S. law it is not tax resident in the U.S.” That seemed clear enough until his next sentence. “A.O.I. is also not tax resident in Ireland because it does not meet the fact-specific residency requirements of Irish law.” It’s Irish, according to American law; not Irish, according to the Irish. A.O.I., in fact, does not legally exist anywhere, even as it takes in much of the profits from Apple sales outside of the United States.”
Yes, they do. And that’s not illegal.
It’s only illegal when the poor commit the crime. When it is businesses or the elite there is always a little loophole for them to justify their actions.
Their tax scheme is in my opinion morally illegal and I am glad someone is putting an end to it.
Didn’t the EU just rule that it was illegal?
No. The EU Commission challenged the Irish Tax Law now. As the Irish Government already said, it will defend its law in court.
LOL OK. You’ve made your position perfectly clear. No point in continuing the discussion. Have a nice day.
Yes and the EU said that the Irish law were illegal tax incentives. Rulings like this happen quite frequently in international trade disputes. Airbus and Boeing frequently have their governments (EU and US) sue each other for illegal, anticompetitive subsidies (some of which are disguised as tax breaks) at the WTO. This is hardly some novel case. It seems like technology writers should better understand trade policy before speaking on it. For example, he’s the EC slapping down Huawei due to illegal subsidies.
http://www.telegraph.co.uk/finance/china-business/10057301/EC-ready-to-hit-Chinese-companies-with-sanctions-over-illegal-subsidies.html
Absolutely right, though I wouldn’t go so far to say ‘technology writers should better understand trade policy’ because all Shawn King said was ‘Unusually strong words from Apple’s CEO’.
From a politically correct CEO like Tim Cook, his words were unusually strong.
I think he knows very well how to play this. Or his european advisers. 😉
He also said they didn’t do anything illegal. Which is precisely the opposite of what the EU ruling said.
It’s not a cheap shot. Taxes are disproportionately tied to who gets the best deal, corporations pay far too little.
all of a sudden we’ve awoken to the idea that multi-national corporations are not a substitute for government and the services it provides. The altar of cronies capitalism needs to topple.
That being said, the tax codes of many nations need to be rewritten so that little people and big corporations all pay a legitimate fair share towards the commonwealth of all nations.
That sir, is a canard. Shame on you for invoke such an absolutist statement. Go back to philosophy 101.
You’re wrong.
It could cost the EU. They are going after Apple because, Apple is a huge multi national, not based in the EU. They may go after others … IF untimely successful.
Either way the EU could use, however. If other companies decide not to “invest” in the EU or decide not to expand… or maybe Ireland will suffer more … then Irish exit the EU.
and sink…
Maybe the governments should not charge so much tax so frivously? AFAIK, Apple followed the tax code – they made sure they followed the tax code and some EU commission retroactively decided that was not enough tax … so maybe have Ireland change its tax code? Is Ireland a sovereign nation?
Meaux, courts are often wrong, so is the commission, even if it wins.
IF Europe does not want tax loop holes, it should close those loopholes … and have people and companies pay the correct tax. Apple followed Irish law, where it is based… plenty of other multi nationals are free to pay their share of taxes.
Yes, because governments totally spend all their money wisely and never waste any of it on boondoggles.
so it is not illegal for 30 years … and now its illegal?
Unusually strong words. And perhaps unwisely strong. Tim Cook should know better that the public forum is where this battle cannot be won. It can only be lost there.
For those jumping on Apple’s bandwagon on this issue, do you really understand the legalities? If not, isn’t it only open-minded to embrace the possibility that the EU is not completely wrong?
As far as you know … but you don’t know very far. So, perhaps, hold back on the strong opinions?