Tim Cook Pens Open Letter on Tax Evasion Claims, Says Apple is Confident Decision 'Will be Reversed'

[alexgowers]

1) Apple is a publicly traded company, and as such, has a fiduciary responsibility to its shareholders to use any legal means to minimize its tax liabilities.

2) Ireland's current tax laws that Apple is taking advantage of may or may not need to be updated based on how things have changed since they were first written. Whether they should be or not is a subjective matter that can be discussed by all stakeholder parties, and any changes made need to be in line with other Ireland and EU governing policies.

3) However, the EU simply cannot retrospectively change Ireland tax laws on what they think they should have been. The only relevant question is did Apple follow existing Ireland tax law correctly? If so, they cannot impose a retroactive tax on Apple. The EU does have leverage to drive changes to Ireland's tax policies moving forward, though.

4) This type of ham-handed extra-legislative action by the EU is exactly the type of thing that got the "Brexit" stuff started (and even passed). If the EU bureaucrats continue to overstep their boundaries and supersede the legislatures and courts of the member countries, they're going to continue to find themselves with fewer member countries (and more to the point, the net tax-paying countries that can both afford to leave and have the biggest impact when they do).

1) Sure, but legal means within the law.
2) No ireland made an illegal deal with apple it was not authorised to make.
3) The EU heavily funds Ireland compared to it's contributions and would suffer if the EU cut the funding apple owes. Ireland very much needs to claim tax from apple to avoid heavy penalties. The EU very much is LAW.
4) The UK narrowly won an exit from the EU. There are doubts the UK can make a deal without another referendum, The EU is not over-stretching it's beneficial for all member states to charge tax at the correct rates as everyone in the EU gets that cash.

You see to think that apple has done no wrong when they have been told the deal is illegal and they owe taxes. It's not retroactive, it's their current unpaid tax bill.

Sure you might like apple products as do I but the company stinks and makes terrible deals that squeeze the poor and **** anyone who might stand in their way. Apple the corporation does not care about you so don't defend them when they do wrong, that's beyond moronic.

 

[vannibombonato]

The thing most people don't get is that Ireland is not allowed to fully decide its own rules or laws. They're part of EU, which means that there are some limits to what you can or can't do. And these limits exist because being part of the EU gives Ireland and companies operating in Ireland loads of advantages.
In theory these rules are for EU to be a place where each player has kind of the same rules, so that no one has unfair advantages.
And obviously we are not talking about the elephant in the room, which is he fact that Apple has set up, like many other companies, a scheme that is purposely meant to trick the laws (it's he double Irish sandwich, google it). So Tim, let's not talk about ethics and bla bla.

Apple is rightfully trying to pay as little taxes as it can, but when you're selling billions of dollars of stuff to tens of millions of Europeans you can't seriously think that you will be allowed to pay 1% of profits.

We're stupid, but I still hope not so stupid.

All this coming from someone who is very much market friendly and very less governments friendly. But 1% is just wrong: if whatever law from whatever country makes stealing legal, it still won't make it right. So let's not write open letters about what is right or wrong.

 

[Pagemakers]

The thing most people don't get is that Ireland is not allowed to fully decide its own rules or laws. They're part of EU, which means that there are some limits to what you can or can't do. And these limits exist because being part of the EU gives Ireland and companies operating in Ireland loads of advantages.
In theory these rules are for EU to be a place where each player has kind of the same rules, so that no one has unfair advantages.
And obviously we are not talking about the elephant in the room, which is he fact that Apple has set up, like many other companies, a scheme that is purposely meant to trick the laws (it's he double Irish sandwich, google it). So Tim, let's not talk about ethics and bla bla.

Apple is rightfully trying to pay as little taxes as it can, but when you're selling billions of dollars of stuff to tens of millions of Europeans you can't seriously think that you will be allowed to pay 1% of profits.

We're stupid, but I still hope not so stupid.

All this coming from someone who is very much market friendly and very less governments friendly. But 1% is just wrong.

1%? Try .005%

http://news.sky.com/story/apple-ordered-to-pay-836413bn-in-back-taxes-10557945

 

[vpro]

I wonder how long the appeal process will take before a final outcome is decided and either Apple has to pay or doesn't. Could be years I suspect.

Whereas when an ordinary US or Canadian citizen makes a mistake because they are too poor to know better, gets INSTANT penalties and time behind bars, no appeal. These multinational corporations employ tax evasion officers to work for them around the clock, they can hire powerful attorneys and get away with everything.

 

[Glideslope]

I wonder how long the appeal process will take before a final outcome is decided and either Apple has to pay or doesn't. Could be years I suspect.

5-7 years IMO.
[doublepost=1472586644][/doublepost]

1) Apple is a publicly traded company, and as such, has a fiduciary responsibility to its shareholders to use any legal means to minimize its tax liabilities.

2) Ireland's current tax laws that Apple is taking advantage of may or may not need to be updated based on how things have changed since they were first written. Whether they should be or not is a subjective matter that can be discussed by all stakeholder parties, and any changes made need to be in line with other Ireland and EU governing policies.

3) However, the EU simply cannot retrospectively change Ireland tax laws on what they think they should have been. The only relevant question is did Apple follow existing Ireland tax law correctly? If so, they cannot impose a retroactive tax on Apple. The EU does have leverage to drive changes to Ireland's tax policies moving forward, though.

4) This type of ham-handed extra-legislative action by the EU is exactly the type of thing that got the "Brexit" stuff started (and even passed). If the EU bureaucrats continue to overstep their boundaries and supersede the legislatures and courts of the member countries, they're going to continue to find themselves with fewer member countries (and more to the point, the net tax-paying countries that can both afford to leave and have the biggest impact when they do).

Thank you. There is still hope for Mankind.

 

[BaldiMac]

150 posts and still working from out of context numbers without a hint at why the tax rate appears so low.

HINT: Apple pays the same 12.5% corporate tax rate as everyone else in Ireland.

 

[dogslobber]

Why not pay the back tax then milk the positive publicity? This posturing doesn't by Cook doesn't address the fundamental issue: Apple's tax rate is still too low.

 

[nocturnum]

Some highlights in common English.

---

"We are confident that the Commission's order will be reversed."

We are confident that we have enough resources at our disposal to get ourselves out of this one.

---

"Using the Commission's theory, every company in Ireland and across Europe is suddenly at risk of being subjected to taxes under laws that never existed."

Using the Commission's theory, every company with 0.005% tax rate in Ireland and across Europe is suddenly at risk of being subjected to taxes under laws that already exist for everyone else.

 

[BaldiMac]

Why not pay the back tax then milk the positive publicity? This posturing doesn't by Cook doesn't address the fundamental issue: Apple's tax rate is still too low.

Because it only appears to be so low. The EU wants Ireland to tax profits that Apple has attributed to the main US corporation because the US isn't taxing the money until it's repatriated. It's more complicated than "Apple tax low".

 

[koruki]

If we ignore how much money Apple has as it already makes people scream pay more, what have they done and what would YOU have done here? The law was stated clearly, they did their business and followed the law. Now they go "Op actually, gotcha you're gonna have to pay a totally different amount cause we changed our mind" In a contract, it would not stand. Should they raise taxes? Sure, going forward if they raise the tax then Apple has a choice to stay or leave. That's how the world works, you don't don't invite someone into your house for dinner then slip them a bill unexpectedly on the way out.

 

[shareef777]

Can't say you're getting much sympathy here, Timmy.

You've been hosing customers for years with high prices and (still expensive) entry-level products that just don't perform to an Apple standard. You've been making ludicrous profit margins on every product and building up a wall of cash to sit on. You've been smashing down on suppliers to lower the costs even further, yet maintain those same high prices and margins on products.

You raise prices in countries when the exchange rate is having a few hiccups, when if anything, they should be lowered due to the age of the tech. As you're not an engineer or even a Mac user, you have no appreciation of how much difference even a simple Fusion drive can make in entry-level Mac Minis, for an utterly negligible cost. You do all this and still sniff your own farts about Apple being the best company in the world and make products that enrich people's lives.

Even with all this considered, I've been defending Apple left, right, and centre where I believe it's applicable.

But now that we find out Apple have been paying 0.005% tax on European sales? The deep realisation has hit me that you couldn't give a damn about your customers' experience, and no amount of money or profits will ever be enough for you, or convince you to appropriately put back into the products you sell.

For what utterly little it's worth (and it is very, very, very little to you, I'm sure), you've turned this passionate Apple fan and defender into a jaded, listless user, praying that his 2012 MBP won't die.

THIS is a true Apple fan here. We love what Apple was, not what they've become.

 

[leroypants]

Time for Ireland to join Britain in leaving the EU!

Gotta love the completely clueless Apple zealots screaming for Ireland to exit while having zero knowledge of the EU, what it is, and what Ireland would lose if they left.

 

[SBlue1]

No special deal, any company that brings thousands of jobs to Cork can get this deal.

And that is what is illegal in the EU. The race to the bottom is not good for any country. Ireland was broke in the 80ies and 90ies and had a huge unemployment rate. They used those special deals to lure big companies away from Britain and the rest of Europe to come to Ireland and move those jobs to Cord and Dublin. All those other countries lost jobs and taxes. So they are trying to close those loop holes. The same happened to Luxembourg, the other tax haven in Europe.

 

[Abazigal]

THIS is a true Apple fan here. We love what Apple was, not what they've become.

Maybe that's precisely the problem. Apple has moved on, while some self-styled Apple fans remain stuck in the past with their own archaic notions of what Apple ought to be.

Times changed, Apple has change to suit the times. Accept it, learn to love and accept the new Apple for what it is and move on already.

 

[MH01]

Apple, Ireland and the US government vs the EU commission.. not to mention Google, Facebook and every other company in Apple's same boat.

This will be a complex, long fight.

True.

I pay my taxes in Europe, and I buy lots of American company products, so they can pay thier damn taxes!

Im not sure how many companies got such favourable tax deals to be honest
[doublepost=1472595716][/doublepost]Hey Tim.

I'll support you all the way mate, when I can pay 0.005% VAT on the apple products i buy.

Please focus on product development, cause anything coming out of your mouth recently is jsut PR BS and you are a massive hypocrite in your actions. You only care about one thing PROFIT.
[doublepost=1472595848][/doublepost]

Maybe that's precisely the problem. Apple has moved on, while some self-styled Apple fans remain stuck in the past with their own archaic notions of what Apple ought to be.

Times changed, Apple has change to suit the times. Accept it, learn to love and accept the new Apple for what it is and move on already.

You don't have to accept everything about it. While we can accept apples innovation / products at present etc, we do not have to accept it dodging taxes.

 

[shareef777]

Maybe that's precisely the problem. Apple has moved on, while some self-styled Apple fans remain stuck in the past with their own archaic notions of what Apple ought to be.

Times changed, Apple has change to suit the times. Accept it, learn to love and accept the new Apple for what it is and move on already.

If you want to keep supporting a company that focuses more about the bottom line then their products or customers, feel free to. The company I supported a couple decades ago focused on products and how people used them before all else. I've been cutting back on my Apple purchases until they can bring that passion and focus back.

 

[Abazigal]

You don't have to accept everything about it. While we can accept apples innovation / products at present etc, we do not have to accept it dodging taxes.

I guess it's all a matter of perspective then. I don't see this as an issue of tax evasion, but rather, Apple having made a deal with a country under terms that while controversial, should be legal and honoured.

You want Apple to pay more taxes, change the tax laws and take it from there, not make Apple pay retroactive taxes.

 

[macUser2007]

1) Apple is a publicly traded company, and as such, has a fiduciary responsibility to its shareholders to use any legal means to minimize its tax liabilities.

2) Ireland's current tax laws that Apple is taking advantage of may or may not need to be updated based on how things have changed since they were first written..... blah blah....

Smaller countries, just like smaller states and communities in the US, are often susceptible to large corporations muscling in and getting preferential treatment: The corporation will promise jobs, the local politicians will get taken out to dinners with "celebrity" corporate officers, there will be a publicity campaign promoting the deal as incredibly beneficial to the community, to make it hard for anyone in power to oppose it on the merits.

The end result is that large corporations often get preferential treatment which no small business, local or not, can ever get, which makes a mockery out of the idea of markets and competition. There are studies showing that such sweetheart deals are rarely beneficial to the actual community, although some of the local players who pushed the deal may eventually get a cushy position with the corporation (just like Gerhard Schroeder got with Gazprom's subsidiaries after he sold Germany's energy security to Putin). All in all, despite all the fees, these are relatively cheap deals for the corporations, with an often large payoff.

In the US this would be hard to do, because the individual states don't really have the muscle to resist and because after Scalia, an uppity politician can be thrown out of office fairly easily by corporate money and replaced with someone more malleable.

As Leona Helmsley said, "Only little people pay taxes in the US."

I only wish the US would clamp down on these sweetheart deals, restore faith in the markets and level the playing field again.

 

[MH01]

I guess it's all a matter of perspective then. I don't see this as an issue of tax evasion, but rather, Apple having made a deal with a country under terms that while controversial, should be legal and honoured.

You want Apple to pay more taxes, change the tax laws and take it from there, not make Apple pay retroactive taxes.

I see where you are coming from, but remember Ireland is at fault here.

Though Apple knew they were not paying their Share of taxes by accepting the deal.

Id suggest reading on how the Apple deal is structured in Ireland, its Tax Avoidance.

Also id recommend you have a read into Tax Evasion/Avoidance Schemes, just cause you are involved in a scheme and you pay little tax, does not mean the tax office cannot investigate that scheme and deem it to be illegal, forcing you to pay back taxes. In this case the investigation has determined that what Ireland offered was anti competitive and therefore they have to claim those taxes back. Anti competitive if the keyword here.

What Ireland offered was too good to be true

In other words, when you are offered a deal that sounds to be too good to be true.....it generally is.

As a rational person, If I offered you a brand new Mac Pro that retails for $9600 for $0.48 ....... let that sink in 0.005% percent of $9600.00 is 48 cents! You would not think there is something suspicious about this deal??? Hell yeah!!!!

And this is what apple is doing..... saying, the $0.48 is right, they paid the right amount for it, and will appeal. Disgusting really. And at no point did they think that their mate ireland offering the mac pro at $0.48 was suspicious at "mates rates" while all the other sellers in the EU were charging normal prices.....

*Before people jump in, I know the tax rate is suppose to be around 12%, i just wanted to demonstrate how little 0.005% is on say an actual apple product....* and a rational person would ask questions....
[doublepost=1472600890][/doublepost]

Because it only appears to be so low. The EU wants Ireland to tax profits that Apple has attributed to the main US corporation because the US isn't taxing the money until it's repatriated. It's more complicated than "Apple tax low".

That's an excellent PR reply.

 

[niun]

and a rational person would ask questions....

I don't think Apple just went in and was given this happy rate. I'm pretty sure there have been some tough negotiations to lower it over the years.

I think the questions they asked were more along the lines of, "Could this be lower?"

 

[Luscious]

Cook should sack up and pay what he owes. It's sad when multimillionaire CEO's pay a smaller percentage of their income in taxes than a construction worker making $40,000 a year. Something is rotten in the US tax code. It's written for millionaires and billionaires by other millionaires, or soon to be millionaires, when they leave office and begin to collect on the money they are owed for the votes they cast.

 

[MH01]

I don't think Apple just went in and was given this happy rate. I'm pretty sure there have been some tough negotiations to lower it over the years.

I think the questions they asked were more along the lines of, "Could this be lower?"

You are right.

Im confident it was Ireland that offered the initial sweet deal, and Apple being apple, got it lowered in order to remain in Ireland. Im sure "lobbying" behind the scenes happened. Be interesting if action is brought against individuals.

 

[now i see it]

The absurdity of it all...
Apple pays 0.005% in taxes, which is found by the EU after a two year investigation to be illegal, so Apple is told to pay up.

And what does Apple say?
No, no, no. We deserve to pay 0.005% in taxes and we're going to go screaming and kicking (essentially through appeals) to get our way.

Man! This really puts Apple in a very embarrassing, awkward and extremely bad light. Shameful. I like my iPhone, but I'm not liking this company so much anymore.

I used to.

 

[thewitt]

Nothing illegal about it under Irish law. Tell the EU to bugger off.

 

[Glideslope]

1) Sure, but legal means within the law.
2) No ireland made an illegal deal with apple it was not authorised to make.
3) The EU heavily funds Ireland compared to it's contributions and would suffer if the EU cut the funding apple owes. Ireland very much needs to claim tax from apple to avoid heavy penalties. The EU very much is LAW.
4) The UK narrowly won an exit from the EU. There are doubts the UK can make a deal without another referendum, The EU is not over-stretching it's beneficial for all member states to charge tax at the correct rates as everyone in the EU gets that cash.

You see to think that apple has done no wrong when they have been told the deal is illegal and they owe taxes. It's not retroactive, it's their current unpaid tax bill.

Sure you might like apple products as do I but the company stinks and makes terrible deals that squeeze the poor and **** anyone who might stand in their way. Apple the corporation does not care about you so don't defend them when they do wrong, that's beyond moronic.

1) Apple was within the Law until the Brussels Commission changed their interpretation of it.
2) While not condoning an effective rate of 2% in any way, the EU has been aware of these agreements from day one. It is only an issue now as the EU seeks additional revenue to deal with it's internal structural anomalies.
3) Ireland was never in a position of facing punitive actions until Brussels effectively changed their interpretation of the law.
4) The UK exit will be strengthened by the change in interpretation of law in Brussels. Foreign investment will now stop and consider, "will they change the rules on me mid stream?" The Brussels Commission is playing with fire.

When Merkel looses the German election Brussels better pray hard. Germany turned Nationalistic when they are 40% of EU GDP could make Brexit look like a stroll through an Apple Store.