Apple says several billion dollars set aside for US taxes

CEO Tim Cook gestures to the audience as he closes the company’s World Wide Developers Conference keynote in San Francisco, California, U.S., June 13, 2016.

In an interview with the Irish Independent, the Apple AAPL, +0.09% boss firmly defended the company’s tax arrangement with Ireland, which, according to the European Union, allowed the iPhone maker to pay substantially less tax than other businesses. “Ireland is being picked on, and this is unacceptable”, he said in the interview published Thursday.

COOK’S LETTER:”In Apple’s case, almost all of our research and development takes place in California, so the vast majority of our profits are taxed in the United States”.

It’s been found that Apple had been benefitting from illegal tax profits and because of this the European Commission instructed Ireland to recover the criminal aid from Apple and the amount will come to around $14.5 billion. “I think we should stand up and say that very clearly”.

He again asserted that Apple pays a worldwide tax rate of 26.1% and that the 0.005% effective tax rate mentioned by the European Commission was a “false number”. Ireland has said they plan to appeal the Commission’s ruling and Apple will do the same. She said this case creates uncertainty for many multinational companies across Europe.

Competition commissioner Margrethe Vestager imposed the sanction on Apple earlier this week in a case that has riled both United States and Irish authorities. “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.

We examined some of the points Cook made in the letter, consulting with five tax experts to fact-check the chief executive’s statements.

“It’s total political crap”, Cook said about the EU’s conclusion.

The issue of how much money Apple pays in taxes is also a bit of a red herring. Ireland’s Independent Alliance party says it is reviewing the decision and needs to consult with Noonan, tax officials, and independent experts.

“It’s maddening. It’s maddening and disappointing”, said Mr Cook.

The ratings firm said its A+ rating on Ireland, which is four levels below its top-notch AAA stance, is unaffected by the commission’s decision, which Taoiseach Enda Kenny is trying to get Cabinet approval to appeal. “I have been concerned that it reflected an attempt to reach into the US tax base to tax income that ought to be taxed in the United States”, he said on Wednesday.

Officials from the United States, the European Union and other G20 economies will meet in Hangzhou, China next week and were due to discuss how to clamp down on global tax avoidance.