Brussels tax bill ‘political crap’, says Apple chief Tim Cook

Apple is on the hook for 13 billion euros (around $14.5 billion in US currency) in back taxes owed to Ireland after the European Union ruled the company had dodged its tax obligations by taking advantage of a loophole.

“They just picked a number from I don’t know where”, Cook told the Irish Independent, estimating Apple’s average annual tax on its profits at 26 percent. Charles Schumer, D-New York, calling it a “cheap money grab by the European Commission, targeting US businesses and the USA tax base”.

But Apple CEO Tim Cook told local broadcaster RTE on Thursday that Apple’s commitment to Ireland was undiminished and investment in the country will continue “as per plan”.

The investigation found that Apple routed nearly all the taxable profits from European sales to two Irish-based subsidiaries, which shifted the money to a “head office” that had no employees or facilities and was not taxed in any country.

Following an in-depth state aid investigation launched in June 2014, the European Commission concluded that two tax rulings issued by Ireland to Apple have substantially and artificially lowered the tax paid by Apple in Ireland since 1991.

The companies say they want to see a lower U.S. tax rate before the bring it back; now the top rate is 35 percent.

The corporate giant paid just $50 in tax for every million it made selling iPhones and iPads to most of the world outside America, the European Union claimed, equal to a tax rate of just 0.005% in 2014.

“Right now I would forecast that repatriation to occur next year”.

In Paris, French Finance Minister Michel Sapin backed Vestager’s view that Apple’s Irish tax arrangements amounted to abnormal state aid.

As Apple did in its fight with the Federal Bureau of Investigation, it could be leading the way as the unofficial voice of the tech community in its objection to the European Union ruling. The European Commission also said that Ireland’s tax laws enables Apple in this regard. In a public letter to Apple customers on August 30, Cook wrote: “We are committed to Ireland and we plan to continue investing there, growing and serving our customers with the same level of passion and commitment”. Apple also accrued several billion dollars in U.S. deferred taxes on those profits earned in 2014.

In addition, Apple has provisioned “several billion dollars” from its profits in 2014 to be repatriated to the United States, he said.

Apple said on Tuesday that the decision would be harmful for jobs.

A spokesperson told Bloomberg in a statement: ‘We believe that retroactive tax assessments by the commission are unfair, contrary to well-established legal principles, and call into question the tax rules of individual Member States. Austria welcomed EU’s decision on ruling against Apple and asking the company to pay 13 billion euro in the form of back-taxes.

He added that the €13bn (£11bn) tax bill Apple received was “political” and based on “false” numbers.