Apple’s Tim Cook says EU tax ruling is ‘total political crap’
The European Union found Tuesday that Apple contributed almost no tax on profits for sales across all EU nations and has been ordered to pay up to $14.5 billion in back taxes to Ireland.
Apple Inc. Chief Executive Tim Cook on Thursday aggressively fought back against a European Union ruling that the company owed Ireland up to $14.5 billion in back taxes, calling the case “total political crap.”
In two interviews with Irish media, Cook said Apple has done nothing wrong and was confident European courts would overturn the ruling on appeal.
“It’s maddening. It’s disappointing. It’s clear that this comes from a political place,” Cook said in a radio interview with Ireland’s RTE News.
“When you’re accused of doing something so foreign to your values it brings out an outrage in you,” he said.
Cook was more blunt in an interview with the Irish Independent newspaper. He blasted the assertion by a top EU regulator that Apple paid a 0.005% tax rate in Ireland in 2014 — far below the nation’s low 12.5% corporate rate.
“It’s total political crap,” Cook said of the figure. “They just picked a number from I don’t know where.”
It’s maddening. It’s disappointing. It’s clear that this comes from a political place.
— Tim Cook, Apple CEO
Apple paid taxes at the 12.5% rate — a total of $400 million — in 2014, he said.
After a two-year investigation triggered by a U.S. Senate probe, EU officials on Tuesday said Apple had struck an illegal deal with Ireland that allowed the technology giant to pay almost no taxes from 2003 to 2014 on profits for sales throughout the 28-nation region.
Margrethe Vestage, the top competition official for the European Commission, the EU’s executive body, said the deal amounted to illegal state aid to Apple from Ireland.
The investigation found that Apple routed almost 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.
Ireland was ordered to collect up to $14.5 billion in back taxes, plus interest.
The ruling drew bipartisan criticism in the U.S., with Obama administration officials saying the EU was trying to improperly wring more money out of American multinational companies.
Apple is just the latest U.S. company to be targeted. Last year, EU regulators ordered the Netherlands to collect $34 million in back taxes from Starbucks Corp. Tax breaks from Luxembourg for Amazon.com Inc. and McDonald’s Corp. are also under investigation.
Cook said he was confident that Ireland would appeal the tax ruling along with Apple, although the nation’s government has not yet made a decision.
He was particularly upset at the EU’s demand for retroactive tax payments.
“It’s sort of like playing a sports game, winning a championship and later finding out that the goals count differently than you thought they did,” Cook told RTE News. “It lacks any level of fairness.”
In both interviews, Cook said Apple remained committed to Ireland. The company opened its first factory there in 1980 and is breaking ground on an $800-million data center.
“There wasn’t a special deal between Ireland and Apple,” Cook said. “We haven’t done anything wrong and the Irish government hasn’t done anything wrong.”
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