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Apple CEO Tim Cook on EU Apple Tax Case: 'Total Political Crap' (arstechnica.com) 410

Earlier this week, Apple was ordered to pay a record sum of 13 billion euros plus interest after the EU said Ireland illegally slashed the iPhone make's tax bill. At the time, Tim Cook found the accusations "baseless." In a new interview, he had more things to say:A war of words has erupted between Europe's competition chief and Apple CEO Tim Cook after Ireland was ordered to reclaim $14.5 billion in back taxes from the company. Cook, in an interview with the Irish Independent, labelled Brussels' competition chief Margrethe Vestager's decision as "total political crap." He claimed Ireland was being "picked on" and that he hoped to see the Irish government launch an appeal against the ruling. Vestager refuted that claim when quizzed by reporters on Thursday. "This is a decision based on the facts of the case. The figures that we used in our decision are the figures that we got from Apple themselves," she said. "There are very, very few figures in the public domain. More transparency would be a good thing, for example, a country by country reporting. If it was up to me, the non-confidential version of the decision would have been published yesterday, because that is another way of enabling everyone to see what we have decided and on what basis we have made this decision. Right now the ball is in the hands of Apple and Ireland."
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Apple CEO Tim Cook on EU Apple Tax Case: 'Total Political Crap'

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  • by Anonymous Coward on Thursday September 01, 2016 @12:53PM (#52808759)

    It's "political crap" because it's something you don't agree with. Law of the land, buddy.

    • The issue for me is that it's retroactive change in the tax. Never mind having a high tax rate or low tax rate, just don't go and change the tax agreements and rates after the taxes have already been paid. Who's going to want to put a business in Europe when it's uncertain how much the taxes will be; are they supposed to put 10-20% of their income into escrow just in case the tax rates change retroactively?

      If EU wants to change Ireland's tax rates then it should do so for future taxes only instead of tryi

  • I'm sure there's some other motivation in hitting one of the big fish for this tax haven nonsense... But until Apple provides concrete evidence that they followed every law (read: tax filings and supporting documentation), then anything from Mr. Cook is just an attempt to save face.
    • Re:Put up or shut up (Score:5, Informative)

      by Anonymous Coward on Thursday September 01, 2016 @01:07PM (#52808863)

      I agree they should pay, but actually it doesn't matter if Apple has obeyed the law, because this case is not about Apple's compliance with law. It's about Apple _and_ Ireland.

      Ireland could have given Apple a sweetheart deal that was better than any other Irish business was offered, and that could be (dubiously) seen to be in compliance with the Irish tax code (see for example how much Google had to repay in the UK; far less than they should have). Apple could be paying Ireland all that Ireland asked for (which is, apparently, sweet Fanny Adams).

      The point here is that the EU is punishing _Ireland_ for giving Apple that deal, and requiring Ireland to make Apple pay back taxes.

      Why? Because what Ireland did in making this offer is deemed to be unfair competition in Europe -- among other states. In essence, the EU is meant to be a level playing field, and Ireland gave Apple a truly tiny tax bill in a way that distorts fairness within the EU.

      So it's political but it is not crap; it's about Ireland meeting their obligations to the EU.

      Ireland should claim the money, Apple should pay.

      It's a tiny amount of money compared to what Apple makes, and if they are so concerned about fairness, they should take their money home to the USA. But oh no, they want a tax holiday. Which totally explains the deal they struck with Ireland; they are waiting for a tax holiday in the USA and don't want to pay any taxes elsewhere.

      CAPTCHA: clubroom. (I swear there's a sarcastic AI at work)

      • Re: (Score:3, Interesting)

        by aardvarkjoe ( 156801 )

        The point here is that the EU is punishing _Ireland_ for giving Apple that deal, and requiring Ireland to make Apple pay back taxes.

        It requires some real mental contortions to paint grabbing 13 billion Euros from Apple as punishing Ireland. Ireland got what they wanted out of the deal already -- more tax revenue and jobs than they would have had otherwise. This is obviously an attempt to punish Apple.

        • The point here is that the EU is punishing _Ireland_ for giving Apple that deal, and requiring Ireland to make Apple pay back taxes.

          It requires some real mental contortions to paint grabbing 13 billion Euros from Apple as punishing Ireland. Ireland got what they wanted out of the deal already -- more tax revenue and jobs than they would have had otherwise. This is obviously an attempt to punish Apple.

          Seeking owed taxes from anyone will always be "an attempt to punish". The question is, is it a legitimate pursuit of justice.

          • Re: (Score:2, Interesting)

            by SvnLyrBrto ( 62138 )

            You're missing the point. Ireland doesn't WANT the taxes. Ireland is perfectly happy with what they have. Ireland doesn't think Apple owes them anything beyond what they've already paid.

            Tim Cook is completely right. This is nothing more than a spiteful political attack, coming from the "un-cool tech nerds are destroying culture" narrative in general, and bias against US tech companies in the EU in general. And don't think it will stop at Apple. France has been on the warpath against Google for a few y

            • by Crashmarik ( 635988 ) on Thursday September 01, 2016 @02:57PM (#52809891)

              You're missing the point. Of course Ireland doesn't want to screw up it's relationship with Apple. Yes Apple and Ireland are happy with the relationship, much the way the way a crook and a fence are happy with their relationship. Ireland is selling tax obligations at a steep discount to Apple for "other valuable considerations" the EU a part owner of those obligations has been sliced out of the deal and is now crying foul.

    • by MightyMartian ( 840721 ) on Thursday September 01, 2016 @01:09PM (#52808883) Journal

      It isn't about whether Apple followed the law or not, it's about the fact that Ireland had no right, by the terms of its international agreements with the EU and as part of its obligations as a member of the Common Market, to negotiate this special deals with Apple, Microsoft and the rest.

      • This may be true.

        But why is this not Ireland's fault? Why are they not forced to collect what is supposedly owed?

         

        • Re: (Score:3, Informative)

          They are being forced to collect what should have been collected. And Apple is being forced to pay what they should have paid. The deal should never have been made, it violated the Common Market rules that Ireland has been party to for decades.

        • by GNious ( 953874 )

          This may be true.

          But why is this not Ireland's fault? Why are they not forced to collect what is supposedly owed?

          huh? Ireland are the only ones being "forced" anything here - They are being told to remedy a 13-year long state-aid given to Apple in the form of excessively low tax.

    • by H3lldr0p ( 40304 )

      That's part of the problem. The laws.

      See, what Apple and Ireland are being accused of is of passing tax legislation that applies specifically and singularly to the Apple corporation itself. The EU commissioners are crying fowl on that part saying that it violates Ireland's treaty with them. From what I understand, Ireland can tax however it wants but that the tax law must apply to all corporations, equally. Apparently the "Double Irish" wasn't enough tax sheltering for Apple. They got some special deals on

    • But until Apple provides concrete evidence

      Guilty until proven innocent.

      • Guilty until proven innocent.

        Is there any question that Apple has been avoiding taxes? Apple admits that fact freely and seems rather proud of it in fact. The only question is whether their activities were actually legal or not but their guilt in avoiding taxes is not in question. Now the EU seems to have determined that they were illegal under the law as well. Apple got special treatment they weren't entitled to and they owe a lot of money they should have paid earlier. Sounds fair to me.

      • by GNious ( 953874 )

        But until Apple provides concrete evidence

        Guilty until proven innocent.

        The EC found that the special agreement between Ireland and Apple was illegal - the guilty part is basically proven.

    • That "other motivation" would be recent public outcry about a sense of fairness. Legality is one thing; and the other is timeliness: this is happening *now* because the EU cares *now*, and the EU cares now because of a global political dialogue about economics that keeps going from "look how many poor people" to "OMG THE 1% AND BUSINESSES!"

      This kind of thing is interesting to me because it doesn't actually help anything, or at least it doesn't in my part of the world (the United States). Over here, bu

  • by Anonymous Coward
    Wait, I thought that liberals like Cook were all for gouging those eeebil corporations and making them pay their fair share? If he was being consistent, he'd be happy to pay and then ask, "thank you sir, may I have another?"
  • "There are very, very few figures in the public domain"

    What figures is it that she's referring to? Apple is publicly traded, are there numbers about revenue that are being hidden from her? Maybe, and that would be a whole other set of crimes to tack onto tax evasion.

    "More transparency would be a good thing, for example, a country by country reporting"

    Well let's start with Belgium....surely she has access to those numbers?

    "If it was up to me, the non-confidential version of the decision would have been publ

  • by BrendaEM ( 871664 ) on Thursday September 01, 2016 @01:00PM (#52808813) Homepage

    I don't understand. I just thought we did business in various countries around the world, and didn't pay taxes. People,people are supposed to pay all the taxes.

    : P

  • by Anonymous Coward on Thursday September 01, 2016 @01:01PM (#52808819)

    Baseless? [fastcompany.com]

  • by frank_adrian314159 ( 469671 ) on Thursday September 01, 2016 @01:05PM (#52808847) Homepage

    Translation: Waaaahhhh!

  • Embalming Fluid still the only known cure for greed.
  • Cry me a river (Score:5, Informative)

    by JonnyCalcutta ( 524825 ) on Thursday September 01, 2016 @01:10PM (#52808889)

    It is illegal in the EU to provide state aid to entice companies to setup in one country over another. It has been this way since EU year dot, to create a level playing field. It is pretty much the point of the EU. If you don't like it, don't join the EU.

    If Apple funnel all their EU profits through Ireland without paying tax in the country of sale, but only pay tax on sales made in Ireland (because Ireland conveniently ignore the rest), then that is state aid. Ireland know this. If Apple didn't know this they should sack their lawyers.

    All the rest is PR and bluster.

    • So why isn't the burden on Ireland to fix/pay for this? They're the ones supposedly out of compliance with EU tax laws.

      • by AuMatar ( 183847 )

        It is Ireland's burden to remove the illegal laws. But that doesn't mean Apple gets to keep their illegal gains. This isn't just a case of changing the rules, its saying the old rules were illegal so they never could have applied in the first case. Meaning their special privlidges should never have existed and they have to pay the same rate as everyone else. If they don't like that, they shouldn't lobby for special rules. Personally I'd say they should be fined a multiple to prevent them from trying ag

    • Re:Cry me a river (Score:4, Informative)

      by ljw1004 ( 764174 ) on Thursday September 01, 2016 @01:28PM (#52809061)

      If Apple didn't know this they should sack their lawyers.

      Right. That's the thing that gets me. Folks say that "Apple was just following the tax laws" -- or more accurately, that Apple's highly paid team of tax lawyers had figured out detailed and sophisticated ways to leverage the precise letter of the law to their advantage. Except apparently they hadn't researched the precise letter of the law carefully enough.

      Ireland had on its books one set of laws which resulted in favorable tax regime for Apple. Meanwhile the same books have another set of laws relating to EU harmonization, which supersede the first, which didn't result in favorable tax regime for Apple:

      https://en.wikipedia.org/wiki/... [wikipedia.org]
      The European Communities Act 1972, as amended, provides that treaties of the European Union are part of Irish law, along with directly effective measures adopted under those treaties.

      Did Apple's tax lawyers simply not know about the EU treaties applicable to their tax liabilities? Did they not know that the favorable tax regimes they planned together with Ireland were in violation of the EU treaties? Or did they know about them, keep mum, and let the Irish government (hopefully not also taxpayer) take the blame if ever they got found out?

    • by Holi ( 250190 )
      The rule actually predates the EU, it was a carryover rule from the EEC.
  • Crap? (Score:5, Interesting)

    by whitroth ( 9367 ) <whitroth@5-cen t . us> on Thursday September 01, 2016 @01:14PM (#52808941) Homepage

    Sounds like both Cook and Apple. They're on overpriced commodity hardware, and playing international games to avoid paying local taxes.

    From the US IRS website:
          1972: 16.67% of the federal revenue stream from individual income taxes, 25% from corporate taxes
          Now: 44+% from income taxes, and 10+% from corporate taxes.

    We pay more, so he doesn't have to. Let's go back to the 1972 tax structure, and see how you like *that*, Cook - you'd be in the 72% tax bracket....

                mark

    • Re:Crap? (Score:5, Insightful)

      by tendrousbeastie ( 961038 ) on Thursday September 01, 2016 @01:37PM (#52809143)

      It's all just taxes on people in the end. Corporations aren't real things, they're abstract - they're just groups of people organised together to do a task.

      Corporation taxes are paid as a proportion of profits (incomes minus costs) - if they go up then there are less profits, which someone has to pay for: generally it will be paid for by some combination of:

      - Workers, through lower wages
      - Shareholders, through lower dividends (and by association, lower stock prices)
      - Consumers, through higher prices
      - Less investment in the business, and hence the productivity of the staff, since the lower profits lead to lower retained earnings

      It may be that you are happy with at least one of these groups paying more (I would guess most are happy with shareholders paying more) but my point is that a corporation doesn't pay anything because it doesn't exist, only people exist and only they pay.

      • by Ken D ( 100098 )

        companies are multinational.
        people are not.

        Imagine that Apple didn't pay taxes, but only their shareholders did... which country would get that tax money?

        • Hello Ken,

          It is a fair point. But keep in mind that you have imposed the condition that only the shareholder pay taxes, whereas this is not the case.

          My first post made the point that if you increase corp tax, then it is various groups of people who, one way or another, have to pay for it.

          It seems to me that the reverse if also true - if you reduce (or eliminate) corp tax, then those same groups of people, in some combination, would receive more money. These people would therefore pay more tax on the money t

    • We pay more, so he doesn't have to. Let's go back to the 1972 tax structure, and see how you like *that*, Cook - you'd be in the 72% tax bracket....

      The world isn't 1972 anymore, the old tax code wouldn't work today... it probably wouldn't even be legal, given newer trade agreements...

  • Picked on? (Score:3, Funny)

    by The Grim Reefer ( 1162755 ) on Thursday September 01, 2016 @01:19PM (#52808987)

    He claimed Ireland was being "picked on" and that he hoped to see the Irish government launch an appeal against the ruling.

    I'm sure Ireland will stand up for their rights and not be forced to accept this kind of treatment. It's appalling. I sure would if someone would "pick on" me by ordering a foreign company to pay me 15 billion euros. I mean really, who would put up with that kind of treatment? What's wrong with Europeans, this isn't the dark ages, you can't treat people like that.

    • I'm sure Ireland will stand up for their rights and not be forced to accept this kind of treatment.

      What do you mean "stand up for their rights"? No one's going to invade Ireland and force them to take that tax off Apple.

      Oh I see you mean thay the EU should let them be a member of the club with all the benefits but without sticking to the rules! Ireland agreed to a set of rules in order to join a club. If they don't like the rules, they are free to leave and no one will stop them.

      Simply really really very b

  • ... but we're going to punish Apple.

    Hey, it's just like anti-gun rhetoric. Bad guy does something bad with a gun, let's punish everyone except the bad guy.

    • by Anonymous Coward on Thursday September 01, 2016 @01:31PM (#52809083)

      Apple is not being punished, they are being required to pay back taxes they avoided because of an agreement deemed non legal.

    • When your accountant screws up your taxes, YOU are the one who is expected to pay up, why is this any different? I'm sure Apple can sue some bureau in the Irish government afterward to try and recoup losses. Whether that will work or not is beyond the scope of this discussion.

    • They both did something illegal - Apple negotiated the deal it had with Ireland, it wasnt simply following Irish law, so now the deal has been declared illegal, Apple is on the hook for the money it should have been paying had it not negotiated...

  • There are two possible translations, based on the context.

    1. Are the allegations based on a) verifiable facts or on b) unconfirmed or debunked rumors?

    If answer=a, then translation="I'm so mad we got caught!"

    If answer=b, then translation="This is a political attack."

  • Tim, you were paying 500ths of 1 percent, you knew EU/EEC rules didn't allow EU/EEC countries to make those kind of deals. If you didn't know that then you should fire your lawyers as they did not do due diligence. So quit crying and pay your fair share.
  • a multi-national corporation has been cheating the system for decades, they should pay taxes on all income earned in the nation they do business with, by claiming their base of operations is in such&such a nation just because it is a tax haven should be illegal, change the law so they have to pay taxes on ALL income earned in the nation they made that income in and then they can not cheat the system by playing this game of multi-national tax haven base of operations, and then governments wont lean so he
  • From what I've read, this is a net wash for Apple, because they get to reduce their US taxes by the amount they pay in foreign taxes. ... but foreign taxes would be paid out of foreign money ... whereas the US tax refund would be in US money.

    Therefore, Apple would get $14B or so re-patriated, without having to pay US taxes for doing so.

    Currently, Apple has a huge cash reserve, but it's not in US money ... so they take loans against it, rather than repatriate it (and pay 35% on it, minus the taxes that have

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