Apple’s chief executive Tim Cook described an EU ruling that it must pay a huge tax bill to Ireland as “total political crap”, but France joined Germany yesterday in backing Brussels as transatlantic tensions grow.
European Competition Commissioner Margrethe Vestager dismissed Cook’s broadside, saying the demand for a €13 billion back tax payment was based on the facts.
Washington has lined up with the tech giant, accusing the EU of trying to grab tax revenue that should go to the US government.
But in Ireland itself, public opinion and the government are divided over whether to take the windfall – which would fund the country’s health system for a year – or reject it in the hope of maintaining a low tax regime that has attracted many multinationals and the jobs they create.
No one did anything wrong here and we need to stand together.Ireland is being picked on and this is unacceptable
Apple has said it will appeal the ruling which Cook attackedin an interview with the Irish Independent.
“No one did anything wrong here and we need to stand together. Ireland is being picked on and this is unacceptable,” the newspaper quoted him as saying. “It’s total political crap.”
Vestager has questioned how anyone might think an arrangement that allowed the iPhone maker to pay a tax rate of 0.005 per cent, as Apple’s main Irish unit did in 2014, was fair.
She said yesterday that the calculations were based on data provided by Apple itself and evidence presented during hearings on Apple tax issues in the US.
Asked if she accepted Cook’s comments on the ruling, she told a news conference: “No, I will not. This is a decision based on the facts of the case.”
The lines of battle are forming on both sides of the Atlantic. In Paris, French Finance Minister Michel Sapin backed Vestager’s view that Apple’s Irish tax arrangements amounted to abnormal state aid.
“The European Commission is doing its job,” he told a news conference. “It’s normal to make Apple pay normal taxes.”
German Economy Minister Sigmar Gabriel also supported the Commission on Tuesday. However, Britain – which voted in June to leave the EU – has stayed out of the row, saying it is an issue for the Irish government, Apple and the Commission.
Opinion is divided on the streets of Dublin. Some argued Ireland had to keep drawing foreign investors with low tax rates to provide jobs. But others said the government should drop the idea of appealing the decision and take the money.
“They are doing the wrong thing. They don’t care about the normal people,” said Louise O’Reilly, 57, a full-time carer for her diabetic and partially blind mother.
“The money should be spent on the old-age pensioners who worked all their lives and are struggling to survive.”
O’Reilly’s mother pays €10 tax on a monthly pension of €1,050, a higher rate than the EU said Apple’s main Irish unit paid on its profits in 2014.
By contrast, Cook estimated Apple’s average annual tax on its global profits at 26 per cent. “They just picked a number from I don’t know where,” he said.
However, in a separate radio interview he promised to boost tax payments by repatriating billions of dollars in global profits to the US next year.
“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... I think it’s a desire to reallocate taxes that should be paid in the US to the EU.”
Apple would fight closely with Ireland to overturn the ruling – by far the largest anti-competition measure imposed on a company by the EU – which he said had “no basis in law or in fact”.
An Apple logo on the window of an authorised Apple reseller store in Galway, Ireland. Photo: Clodagh Kilcoyne/Reuters