Tim Cook Calls Apple's Irish Tax Avoidance Accusations 'Total Political Crap'

[MrX8503]

That's often the conclusion when you only read the prosecution's case.


Apple pays the standard Irish tax rate of 12.5% on the income that it allocates to it's Irish corporation. These shockingly low rates are made up effective rates based on the ridiculous assumption that none of the revenue from sales in Europe should be allocated to the main Apple Inc in the U.S.

Sounds like the 0.005% rate is BS then.

 

[leroypants]

It amazes me how someone like Lance Armstrong has more credibility than Tim does right now.

 

[diipii]

Apple CEO Tim Cook today spoke with Paschal Sheehy, the host of Irish radio show Morning Ireland, providing more commentary on the situation with the European Commission and its decision to make Apple pay 13 billion euros in back taxes from a period between 2003 and 2014.

Cook's stance falls in line with his open letter on the situation from earlier in the week, first providing backstory about Apple's history in Ireland and then remaining hopeful that the ruling will ultimately be overturned. His wording -- calling the ruling "political crap" -- also echoes an interview from late last year surrounding a similar tax evasion topic.

The radio show marks the first interview Cook has made since the European Commission's ruling earlier in the week. He calls the decision "wrongheaded," and specifically refers to the 0.005 percent tax rate claim as a "false number." In its ruling, the EC stated that Apple paid only a 0.005 percent tax on its European profits, but Cook affirmed that Apple is "subject to the statutory rate in Ireland of 12.5 percent," and that the company "paid $400m in taxes in 2014."

When asked directly how he feels when Apple is painted as gaining an "illegal" advantage over tax benefits, Cook mentioned his frustrations over the ruling, and compared it to the company's reaction to the FBI drama earlier in the year, saying Apple never chooses the "easy thing" over the "right thing." In this vein, responding to the question of whether Apple has anything to apologize for or if it did anything wrong, Cook said succinctly "no, we haven't done anything wrong."
Most of the rest of the interview emphasizes the "37-year-old marriage" between Apple and Ireland, a union that's "great for the community" of the country as it is for Apple and the people it employs there. Cook said that Apple will continue to focus on building a presence in the country, which includes being able to finally construct a huge data center in Galway County over the next 10-15 years.

Ultimately, Cook has "faith in humanity" and "faith in what is just and right will occur," retaining the positive outlook from his open letter that the ruling will be overturned. Regarding Apple's plan to appeal, alongside the Irish government, Cook said that "the decision is wrong, and it's not based on law or facts, it's based on politics. And I think it's very important that we stand up and say that very loudly."

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Article Link: Tim Cook Calls Apple's Irish Tax Avoidance Accusations 'Total Political Crap'

Not paying tax is theft from the people.
There is no "easy" or "right" thing there is only the right thing or the wrong thing. Cook knows that and he knows we know it.
Issuing staements with "crap" in them is empty posturing. Crook's rep is down the pooper along with Apple's.
The time is fast approaching when, post Crook, we will all say, "what was Apple thinking".

 

[BaldiMac]

How is paying 0.5% tax "right" and "just" when prevailing tax rates are over 12% in Ireland?

Again, Apple pays 12.5% on Irish income. The issue is the income associated with the stateless AOI that is not taxed at all. According to Irish law, Ireland is not entitled to collect taxes on this income.

Apple has no US tax liability until they bring that money to the US.

Correct.

At 22.5% it is not coming.

TBD

 

[lederermc]

Is Apple ripping of the US tax payers or is Apple just ripping off the other EU states that weren't able to collect on profits generated by sales in their country? I would support a taxing policy that allocated total (global) profits to each country based on sales in that country. If 5% of Apple sales is in Germany then Germany deserves to tax 5% of Apples total (Global) profits. If 20% of Apple sales ($) is in the US then we deserve to tax 20% of Apple's total (Global) profits.

 

[bitslap47]

I love how Tim says Apple "finds itself in an unusual position" in the matter. People who simply pay the taxes they're asked to pay don't fall into such a position...

Ireland says Apple did pay what they were asked to pay. Ireland did the asking, so they would know.

 

[BaldiMac]

Sounds like the 0.005% rate is BS then.

Correct.
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Is Apple ripping of the US tax payers or is Apple just ripping off the other EU states that weren't able to collect on profits generated by sales in their country? I would support a taxing policy that allocated total (global) profits to each country based on sales in that country. If 5% of Apple sales is in Germany then Germany deserves to tax 5% of Apples total (Global) profits. If 20% of Apple sales ($) is in the US then we deserve to tax 20% of Apple's total (Global) profits.

Wow. That would be crazy unfair.

 

[apolloa]

A perfect and clear example of how Apple and Tim Cook have no clue what so ever about European attitudes and culture, you see we believe in the richest entity on the planet paying its fair share of taxes not 0.005, and when the CEO calls it political crap we just see that CEO as utterly stupid and a bit of a ****.

I'm sure those appologists on here who have made up facts are in full effect on here.

 

[niun]

Ireland says Apple did pay what they were asked to pay. Ireland did the asking, so they would know.

Again, you think Apple is the innocent party in this? You don't think they did some posturing and hard negotiating to get that tax rate down to nearly nothing?

 

[tgara]

Yes, we should cut all corporate taxes to 0% and privatize everything (you're driving on ACME Inc. road, that would be $10 per mile (km for most of EU) please!). Do you know why 3rd world countries are 3rd world countries? Because they don't collect any taxes (the little they do collect goes to minsters' Swiss bank accounts). So essentially, what you're advocating for is making Europe a 3rd world country where 90% live in cardboard boxes across the street from million dollar high rises like they do in India.

Easy, pal. Where did I say we should cut corporate taxes to zero? Where did I say privatize everything?

 

[BaldiMac]

A perfect and clear example of how Apple and Tim Cook have no clue what so ever about European attitudes and culture, you see we believe in the richest entity on the planet paying its fair share of taxes not 0.005, and when the CEO calls it political crap we just see that CEO as utterly stupid and a bit of a ****.

You just have to continue to ignore the fact that they don't pay a 0.005% tax rate to stay angry about this issue.

 

[zin]

That's often the conclusion when you only read the prosecution's case.


Apple pays the standard Irish tax rate of 12.5% on the income that it allocates to it's Irish corporation. These shockingly low rates are made up effective rates based on the ridiculous assumption that none of the revenue from sales in Europe should be allocated to the main Apple Inc in the U.S.

And so it shouldn't. Apple Inc. is a separate entity to Apple Operations International and Apple Sales International.

In actual fact, the reason the low rates exist is because Apple attributed the total revenues of the Irish subsidiaries to "head offices" that did not exist. It has nothing to do with allocating or not allocating revenues to Apple Inc. The Commission never conflates the tax rates paid by Apple Inc. and its entities in Ireland.

Following an in-depth state aid investigation launched in June 2014, the European Commission has 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 rulings endorsed a way to establish the taxable profits for two Irish incorporated companies of the Apple group (Apple Sales International and Apple Operations Europe), which did not correspond to economic reality: almost all sales profits recorded by the two companies were internally attributed to a "head office". The Commission's assessment showed that these "head offices" existed only on paper and could not have generated such profits. These profits allocated to the "head offices" were not subject to tax in any country under specific provisions of the Irish tax law, which are no longer in force. As a result of the allocation method endorsed in the tax rulings, Apple only paid an effective corporate tax rate that declined from 1% in 2003 to 0.005% in 2014 on the profits of Apple Sales International.

 

[leroypants]

Gotta love the Apple zealots tripping over each other to see who can defend the indefensible the most.

 

[BaldiMac]

Again, you think Apple is the innocent party in this? You don't think they did some posturing and hard negotiating to get that tax rate down to nearly nothing?

The didn't negotiate a lower tax rate at all. They pay the same tax rate (12.5%) as any other Irish corporation.

 

[niun]

You just have to continue to ignore the fact that they don't pay a 0.005% tax rate to stay angry about this issue.

Mr Cook disputed the Commission's finding that Apple had effectively paid a corporate tax rate of just 0.005%, or €50 out of every €1m, from one of its Ireland-based subsidiaries in 2014.

"It's a false number. I have no idea where the number came from. It is not true. Here is the truth. In that year, we paid $400m to Ireland, and that amount of money was based on the statutory Irish income tax rate of 12.5%."

Bite of the Apple
However, the European Commission said the rate of 0.005% applied to one of Apple's subsidiaries.

Apple Sales International made research payments totalling $2bn to its parent, Apple Inc, in 2011, which significantly increased in 2014, the Commission said.

"Apple paid an effective tax rate of 0.005% in 2014 on the profits of Apple Sales International.

"Apple has more subsidiaries in Ireland, as indicated in the Commission's decision to open an investigation.

"The tax affairs of other Apple subsidiaries, be it in Ireland or elsewhere, have not been the focus of this investigation," it said.

 

[dampfnudel]

What specifically did he do that should land him in jail?

He probably didn't do anything that should land him in jail because governments and other entities allow a gray area to exist where money speaks and..., often at the disadvantage of others, sometimes including you and I.

 

[BaldiMac]

And so it shouldn't. Apple Inc. is a separate entity to Apple Operations International and Apple Sales International.

Sure, you'd just have to ignore basic principles of international tax law.

In actual fact, the reason the low rates exist is because Apple attributed the total revenues of the Irish subsidiaries to "head offices" that did not exist. It has nothing to do with allocating or not allocating revenues to Apple Inc. The Commission never conflates the tax rates paid by Apple and its entities in Ireland.

That certainly the commission's case.

 

[niun]

"The tax affairs of other Apple subsidiaries, be it in Ireland or elsewhere, have not been the focus of this investigation,"

I have a feeling the longer this is dragged out, focus might be diverted to those other tax affairs.

 

[zin]

Sure, you'd just have to ignore basic principles of international tax law.


That certainly the commission's case.

"Basic principles" are not law. There is no such thing as international tax law in the sense you're discussing. There is such a thing as European Union law.

 

[mazz0]

Tim Cook has chops, and he's absolutely, 100% right.

If the EU commission has a problem with alleged Ireland state aids, then it should fine Ireland, not Apple.

Obeying the current law should never lead to punishment.

They're saying it's illegal therefore they must undo it. What's wrong with that?

I agree that Ireland shouldn't get the money - it should go either to the rest of Europe or to California, or be shared between the two.

 

[BaldiMac]

"Basic principles" are not law. There is no such thing as international tax law in the sense you're discussing. There is such a thing as European Union law.

That's a sufficiently vague and unsupported response.

Here's the more specific explanation from Cook:

Taxes for multinational companies are complex, yet a fundamental principle is recognized around the world: A company’s profits should be taxed in the country where the value is created. Apple, Ireland and the United States all agree on this principle.

In Apple’s case, nearly all of our research and development takes place in California, so the vast majority of our profits are taxed in the United States. European companies doing business in the U.S. are taxed according to the same principle. But the Commission is now calling to retroactively change those rules.

 

[mazz0]

Riiiight, always about doing what's right. What's right would be not hiring lawyers and accountants to minimise the tax you pay and simply paying the obvious straight forward upfront amount each country asks for. It's not hard.
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That's a sufficiently vague and unsupported response.

Here's the more specific explanation from Cook:

Taxes for multinational companies are complex, yet a fundamental principle is recognized around the world: A company’s profits should be taxed in the country where the value is created. Apple, Ireland and the United States all agree on this principle.

In Apple’s case, nearly all of our research and development takes place in California, so the vast majority of our profits are taxed in the United States. European companies doing business in the U.S. are taxed according to the same principle. But the Commission is now calling to retroactively change those rules.

And Cook would have a point, if he wasn't hoarding billions of dollars outside America to avoid paying those US taxes.

 

[chiefsilverback]

I always enjoy the 'holier than thou' posts demanding Apple pay all their taxes. They do pay all their taxes. That's why they employee, presumably very well remunerated, tax experts to ensure they pay exactly the taxes they need to an not a penny more. This is something they are legally required to do because they have a fiduciary responsibility to their shareholders to maximize profit and which means don't pay a penny more in taxes than you need to whilst still operating within the law.

I wonder how many people here purchase from Amazon, pay no sales tax and then write a cheque to their state to pay the tax they should have paid if they'd purchased the item in the state? I'm guessing there aren't many? How many of the small business owners don't itemize and 'expense' everything they can to minimize their tax bill? I'm guessing the answer is not many!

How many of the people complaining about big corporations not paying their taxes voted for Bernie Sanders who ran on a platform of closing loopholes and ensuring everyone paid their fair share, and getting big money out of politics, which is what pays the politicians who make the tax laws that favor big businesses and the very wealthy?

 

[BaldiMac]

Riiiight, always about doing what's right. What's right would be not hiring lawyers and accountants to minimise the tax you pay and simply paying the obvious straight forward upfront amount each country asks for. It's not hard.

Except in this case, they are paying the obvious straightforward upfront amount that Ireland asks for.

And Cook would have a point, if he wasn't hoarding billions of dollars outside America to avoid paying those US taxes.

Gotta love when you demonize people for following the law.

U.S.: If you bring that money to the U.S. you have to pay 35% in taxes.
Apple: Okay, it makes more financial sense for us to keep it overseas until we need it here.

What's the problem?

 

[apolloa]

You just have to continue to ignore the fact that they don't pay a 0.005% tax rate to stay angry about this issue.

Not angry at all? But I do find it funny with people such as yourself, who very clearly have little to no comprehension or understanding about the charges or the tax issue, why they exist, how they have come about to exist, and yet you continue repeatedly to post incorrect opinions presented as facts.