Jobs will be at risk over 13bn euro tax bill, says Apple chief
THE BOSS of Apple has warned that the European Commission has put jobs and investment at risk after ordering the tech giant to pay 13bn euro (£11.1bn) in unpaid tax in Ireland.
Chief executive Tim Cook accused competition chiefs in Brussels of targeting his global brand with laws that did not exist and simultaneously putting every business on the continent at risk.
The tech guru launched the broadside after Competition Commissioner Margrethe Vestager’s landmark ruling into the iPad and iPhone maker’s tax affairs found it paid just 1% tax on its European profits in 2003 and 0.005% in 2014. Two years ago that worked out at 50 euro on every million in profit, she said.
Mr Cook dismissed the threeyear investigation and went direct to his customer base with a message on apple.com and a vow to fight the order in what will likely be years of courtroom battles.
He also claimed: “We have become the largest taxpayer in Ireland, the largest taxpayer in the United States, and the largest taxpayer in the world.
“In Ireland and in every country where we operate, Apple follows the law and we pay all the taxes we owe.”
Ireland’s Department of Finance is expected to lead the legal challenge to the Commissioner’s record findings and tax bill.
Finance Minister Michael Noonan’s response was a charm offensive on satellite channels devoted to money markets and a warning that Ireland does not do “deals” with taxpayers.
“Our tax system is founded on the strict application of the law ... without exception,” he said.
Mr Noonan added that it was necessary to fight the verdict in the courts “to defend the integrity of our tax system, to provide tax certainty to business, and to challenge the encroachment of EU state aid rules into the sovereign member state competence of taxation”.
The unprecedented ruling from Brussels found officials in Dublin gave assurances to Apple in 1991 and 2007 that it was abiding by law in the manner it structured its affairs, recorded profits and made payments to its California offices.
The Commissioner said the treatment of Apple amounted to illegal state aid. The inquiry found that Ireland’s treatment of Apple allowed the global brand to avoid taxation on almost all profits generated by sales in the entire European single market.
TECH GIANT Apple has vowed to overturn a record 13bn euro bill after European chiefs found it had a sweetheart tax deal in Ireland.
In a landmark ruling following a three-year investigation, Competition Commissioner Margrethe Vestager said the maker of iPads and iPhones paid just one per cent tax on its European profits in 2003 and 0.005 per cent in 2014.
The Brussels watchdog found the arrangements dating back to the early 1990s were illegal under state aid rules and gave Apple favourable treatment over other businesses, and ordered the company should pay the record bill - the equivalent to £11.1bn. Ms Vestager said Apple was paying 50 euros in tax on every one million euro of profit it made in 2014.
Ireland’s Finance Minister Michael Noonan and Apple chief executive Tim Cook vowed to fight the verdict.
In a hard-hitting defence of its tax planning and corporate structure, Apple warned of the ramifications for future investment in Europe, where it employs 22,000 people.
“The European Commission has launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and up-end the international tax system in the process,” Apple said.
“The Commission’s case is not about how much Apple pays in taxes, it’s about which government collects the money.
“It will have a profound and harmful effect on investment and job creation in Europe.
“Apple follows the law and pays all of the taxes we owe wherever we operate. We will appeal and we are confident the decision will be overturned.”
The tax bill covers a 10-year period, the longest the commissioner could enforce, for the years 2003 to 2014 of up to 13bn euro, plus interest.
The inquiry found that Ireland’s treatment of Apple allowed the global brand to avoid taxation on almost all profits generated by sales of Apple products in the entire European single market.
It said this was because Apple recorded all its sales in Ireland rather than in the countries where the products were sold.
“Member states cannot give tax benefits to selected companies - this is illegal under EU state aid rules,” the commissioner said.
The Commission’s investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years.
Mr Noonan said he profoundly disagreed with the verdict and denied doing “deals” with taxpayers.
“Our tax system is founded on the strict application of the law ... without exception,” he said.
He added that it was necessary to fight the verdict in the courts “to defend the integrity of our tax system, to provide tax certainty to business, and to challenge the encroachment of EU state aid rules into the sovereign member state competence of taxation”.
“It is important that we send a strong message that Ireland remains an attractive and stable location of choice for long-term substantive investment,” he said.
The case is one of the most high-profile in the fight to redraw boundaries on aggressive tax avoidance, an issue which has put the EU at odds with the US government.
Asked whether Prime Minister Theresa May welcomed the ruling, a Downing Street spokesman said: “This is clearly an issue for the Irish Government, Apple and the European Commission.”