Apple’s chief executive Tim Cook has claimed that the European Commission made up its claims about the business’ tax payments in Ireland.
Earlier this week EU competition commissioner Margrethe Vestager said that Ireland failing to collect taxes from Apple at the standard rate of 12.5 per cent amounted to “state aid” and thus illegally harmed competition across the EU's single market.
However, in an interview with the Irish Independent today, Cook dismissed the EU's claim that his company owes the Irish taxman a bill of €13bn, arguing that the ruling was “total political crap” and warning Ireland that the EU was seeking to expand its powers over national governments.
He told the paper the 0.005 per cent rate it is accused of paying the Commission is a “false number”, saying: “They just picked a number from I don't know where."
Immediately following the announcement, Cook warned that the Apple tax ruling</a? struck “a devastating blow to the sovereignty of EU member states over their own tax matters, and to the principle of certainty of law in Europe.”
According to Cook, the EU Commission has sinister plans to control tax rates across the continent and has started this federal coup by picking on Ireland. Fortunately, the noble folk at Cupertino would help the plucky nation take on this burden.
Apple would collaborate with the Irish government if it launched an appeal against the ruling, said Cook, adding that company would still “go forward” with plans on expanding its presence in Cork despite the commission’s attitude.
"I think we'll work very closely together, as we have the same motivation.” Cook told the Irish Independent. “No one did anything wrong here and we need to stand together. Ireland is being picked on and this is unacceptable."
Vestager claimed that arrangements between Ireland and Apple ensured that in 2014, Apple paid corporate tax at an effective rate of 0.005 per cent in 2014, or just €50 on every €1,000,000 in profit. This was achieved by allocating profits to “head offices” which only existed on paper, according to Vestager, and had neither offices nor employees.
A spokesperson from the commission confirmed its position, saying: "As is explained in our press communication, Apple paid an effective tax rate of 0.005% in 2014 on the profits of Apple Sales International."
Cook dismissed the figures, telling the Irish Independent: "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.”
The $400m claim was based on the statutory corporate tax rate in Ireland of 12.5 per cent, claimed Cook, who added that Apple’s commitment to Ireland “has not been diminished one iota” by the ruling. “We are completely committed to Ireland,” he said, adding that the team there was “world-class. They do such incredible work for Apple and we’re moving forward with the planned investments.”
Ireland’s commitment to Apple has also been reaffirmed by the Irish taxman, who said “the profits of non-resident companies that are not generated by their Irish branches – such as profits from technology, design and marketing that are generated outside Ireland – cannot be charged with Irish taxes under Irish tax law.” ®