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Apple CEO Tim Cook on EU Apple Tax Case: 'Total Political Crap' (arstechnica.com)

Posted by msmash on from the apple-and-taxes dept.

Earlier this week, Apple was ordered to pay a record sum of 13 billion euros plus interest after the EU said Ireland illegally slashed the iPhone make's tax bill. At the time, Tim Cook found the accusations "baseless." In a new interview, he had more things to say:A war of words has erupted between Europe's competition chief and Apple CEO Tim Cook after Ireland was ordered to reclaim $14.5 billion in back taxes from the company. Cook, in an interview with the Irish Independent, labelled Brussels' competition chief Margrethe Vestager's decision as "total political crap." He claimed Ireland was being "picked on" and that he hoped to see the Irish government launch an appeal against the ruling. Vestager refuted that claim when quizzed by reporters on Thursday. "This is a decision based on the facts of the case. The figures that we used in our decision are the figures that we got from Apple themselves," she said. "There are very, very few figures in the public domain. More transparency would be a good thing, for example, a country by country reporting. If it was up to me, the non-confidential version of the decision would have been published yesterday, because that is another way of enabling everyone to see what we have decided and on what basis we have made this decision. Right now the ball is in the hands of Apple and Ireland."

11 of 410 comments (clear)

  1. A Tax Expert Takes Tim Cook's EU Letter Apart... by Anonymous Coward · · Score: 5, Interesting

    Baseless?

  2. Re:Put up or shut up by Anonymous Coward · · Score: 5, Informative

    I agree they should pay, but actually it doesn't matter if Apple has obeyed the law, because this case is not about Apple's compliance with law. It's about Apple _and_ Ireland.

    Ireland could have given Apple a sweetheart deal that was better than any other Irish business was offered, and that could be (dubiously) seen to be in compliance with the Irish tax code (see for example how much Google had to repay in the UK; far less than they should have). Apple could be paying Ireland all that Ireland asked for (which is, apparently, sweet Fanny Adams).

    The point here is that the EU is punishing _Ireland_ for giving Apple that deal, and requiring Ireland to make Apple pay back taxes.

    Why? Because what Ireland did in making this offer is deemed to be unfair competition in Europe -- among other states. In essence, the EU is meant to be a level playing field, and Ireland gave Apple a truly tiny tax bill in a way that distorts fairness within the EU.

    So it's political but it is not crap; it's about Ireland meeting their obligations to the EU.

    Ireland should claim the money, Apple should pay.

    It's a tiny amount of money compared to what Apple makes, and if they are so concerned about fairness, they should take their money home to the USA. But oh no, they want a tax holiday. Which totally explains the deal they struck with Ireland; they are waiting for a tax holiday in the USA and don't want to pay any taxes elsewhere.

    CAPTCHA: clubroom. (I swear there's a sarcastic AI at work)

  3. Cry me a river by JonnyCalcutta · · Score: 5, Informative

    It is illegal in the EU to provide state aid to entice companies to setup in one country over another. It has been this way since EU year dot, to create a level playing field. It is pretty much the point of the EU. If you don't like it, don't join the EU.

    If Apple funnel all their EU profits through Ireland without paying tax in the country of sale, but only pay tax on sales made in Ireland (because Ireland conveniently ignore the rest), then that is state aid. Ireland know this. If Apple didn't know this they should sack their lawyers.

    All the rest is PR and bluster.

  4. Crap? by whitroth · · Score: 5, Interesting

    Sounds like both Cook and Apple. They're on overpriced commodity hardware, and playing international games to avoid paying local taxes.

    From the US IRS website:
          1972: 16.67% of the federal revenue stream from individual income taxes, 25% from corporate taxes
          Now: 44+% from income taxes, and 10+% from corporate taxes.

    We pay more, so he doesn't have to. Let's go back to the 1972 tax structure, and see how you like *that*, Cook - you'd be in the 72% tax bracket....

                mark

  5. Re:Oh yeah? Then what are you gonna do about it? by thaylin · · Score: 5, Insightful

    The deal was illegal, it was not retroactive, since the deal could not legally exist. Sign into a contract that is not legal and see if the law allows it to be binding.

    --
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  6. Re:Oh yeah? Then what are you gonna do about it? by TechyImmigrant · · Score: 5, Insightful

    Law of the land, buddy.

    More like "we have (retroactively) changed the terms of the deal. Pray we do not change it further... buddy". Which is why this is political crap.

    By all means, adjust the law such that Apple pays more going forward. But this is nothing but ex post facto laws, and those are utter bullshit.

    This is the EU saying to Ireland "Your law violates European law - fix it". This is correct. What is sketchy is the retrospective nature of the "and grab a few billion from Apple while you're fixing it". Ireland did close the double-Irish-with-a-dutch-sandwich loophole, but allows existing users of the scheme to carry on until 2020. So that is certainly favouring some businesses over others with different laws for some. This is clearly a violation of European competition law.

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  7. Re:Oh yeah? Then what are you gonna do about it? by Rakshasa+Taisab · · Score: 5, Insightful

    Does this 'no retroactive fines' work for me too when I cheat on taxes?

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  8. Re: So... *IRELAND* did something illegal... by Anonymous Coward · · Score: 5, Insightful

    Apple is not being punished, they are being required to pay back taxes they avoided because of an agreement deemed non legal.

  9. No sympathy for Apple by sjbe · · Score: 5, Insightful

    This is the EU saying to Ireland "Your law violates European law - fix it". This is correct. What is sketchy is the retrospective nature of the "and grab a few billion from Apple while you're fixing it"

    I disagree that it is sketchy at all. Apple is going through all kinds of contortions to avoid paying any taxes. This is in clear violation of the spirit of the law and apparently the EU believes it is in violation of the letter of the law as well. Apple enjoys the benefits of public services from the taxes paid but isn't willing to pay their fair share. I have ZERO sympathy for Apple here. They shouldn't be entitled to any tax breaks not available to individuals or small enterprises. Furthermore if what they did was illegal then there is no retrospective anything. It means that Apple rightfully owes money it hasn't paid.

  10. Law Constant: Had to know this was dodgy by Roger+W+Moore · · Score: 5, Insightful

    If you cheat on your taxes, then yeah you'd be subject to fines for past tax evasion. But if you followed the letter of the tax law at the time, and some time later the government decided the law was wrong and changed it, then no you wouldn't be subject to retroactive fines.

    ...but that is not what happened. Eu law has remained the same. Ireland refused to follow that law and as a result Apple has lots of back taxes owing. I would have had a lot more sympathy for Apple if they had been paying a reasonable rate of tax and the EU had come along and said sorry it should have been 12% instead of 10%. However they were paying something like 0.05% (IIRC the Guardian). Sorry but when you are paying such an insanely tiny tax rate you have to know that you are doing something dodgy. Just because it took the EU some time to figure this out does not mean that you should get off scot free.

  11. Re:Oh yeah? Then what are you gonna do about it? by Ungrounded+Lightning · · Score: 5, Informative

    A better analogy would be the US retroactively eliminating deductions (standard or itemized) retroactively and asking you for back taxes and interest.

    The US already did something like that, several times:

    * In August 1993, President Clinton signed a law raising tax rates on high-income earners and estates. The new rates applied back to the beginning of 1993, and although disgruntled taxpayers went to federal court seeking to have the retroactive application of the rules invalidated, those arguments proved fruitless.

    * In 1987, Congress passed laws retroactively repealing an estate-tax provision, a repeal which cost one taxpayer $2.5 million. The Supreme Court ruled that taxpayers have no right to rely on tax legislation being permanent, with the majority arguing that as long as lawmakers act with "a legitimate legislative purpose," retroactive application is constitutional. Even though one Supreme Court justice argued that the government had used "bait and switch taxation," he nevertheless concurred with the unanimous holding of the Court.

    * A 1976 tax-law change affected homeowners' ability to shelter capital gains from the sale of a home from taxation. One homeowner took advantage of rules that allowed half of all gains to be free of tax, but six months later, President Ford signed a law retroactively limiting the taxable amount. Just as it did more than a decade later, the Supreme Court upheld the law as being constitutional.

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