U.S. accuses European Union of grabbing tax revenues with Apple decision

Update 10.50am: Apple boss Tim Cook thinks the tax ruling against his company is going to cause a rift between the U.S. and the EU.

“We pay the Irish corporate tax rate of 12.5%, we paid $400 million tax in Ireland in 2014”, he said.

El Mundo said it is not just a problem affecting Ireland, Apple and Brussels, but it affects all of the member states of the European Union.

Tim Cook told Irish state network RTE in an interview broadcast Thursday that repatriation should occur next year as profits from 2014 are repatriated.

The European Commission ruled Tuesday that Apple must pay roughly 13 billion euros ($14.5 billion) in back taxes plus interest for what European authorities ruled were unpaid taxes accumulated over a decade that Apple owes Ireland. She said that Ireland allowed Apple to pay an effective corporate tax rate of one percent on its European profits in 2003, down to as low as 0.005 percent in certain years.

He told the paper the 0.005 per cent rate it is accused of paying the Commission is a “false number”, saying: “They just picked a number from I don’t know where”.

He added: ” I think both parties feel like the decision is wrong, is not based on law or facts. Apple and its low tax bills have suddenly become an avatar of USA interests, and there is already speculation that Facebook could be the next tech giant to be targeted by European regulators. Doing so would be fundamentally unfair and would harm competition, growth and tax income in Europe. “In fact, the tax treatment in Ireland enabled Apple to avoid taxation on nearly all profits generated by sales of Apple products in the entire EU Single Market. We believe that makes us the highest taxpayer in Ireland that year”, he told the Irish newspaper.

Apple CEO Tim Cook is not mincing words when it comes to his thoughts on the tax battle facing his company.

Despite the suggestion made earlier in the week that the ruling might damage investment in the EU, Cook was keen to assert that the company will continue investing in Ireland. Companies based in the USA are subject to 35% corporate tax rate on global profits when they bring that money home, though they can also get tax credits for payments to foreign governments. The EC said that “undue benefits” granted to Apple amounted to illegal state subsidies, and will need to be recovered. “It’s total political crap”.

Ireland’s finance minister Michael Noonan has said he disagrees “profoundly” with the decision and is seeking Cabinet approval for an appeal. The EU rules also try to ensure that a country can effectively tax profits generated in its territory. Ireland is also expected to appeal, although the government postponed a decision on Wednesday.

“I don’t think Applehave paid sufficient tax”. Louise Gracia, of Warwick Business School, a Professorial Teaching Fellow in the Accounting Group and researches tax regulation, says: “The average person probably has a right to challenge the reasonableness of Ireland facilitating Apple to pay so little tax on its European profits”.