Apple CEO Tim Cook: ‘We have no special deal with the Irish Government’

29 May 2013

Tim Cook, CEO of Apple

The CEO of Apple Tim Cook told the All Things Digital D10 conference last night that the company has no special tax deal in place with the Irish Government. The issue rose up in the past week after a US Congress sub-committee zeroed in on Apple as part of an overall focus on where US multinationals pay taxes on their profits.

In the past week, Irish Government ministers have repeatedly denied that Apple received a special tax deal since setting up in Cork in 1980.

Ireland’s Minister for Jobs, Enterprise and Innovation Richard Bruton said in the past week that Ireland has a very clear tax code but pointed out that there were phases in the past where specific sectors, like manufacturing, may have paid 10pc corporate tax rather than the 12.5pc that is standard across the board for overseas companies that invest in Ireland.

Responding to questions from All Things D veteran writers Kara Swisher and Walt Mossberg, Cook said last night: “We don’t use tax gimmicks.”

He laid the whole issue of the repatriation of profits and where taxes go at the feet of successive US governments. “It’s a Band-Aid-and-paper-clip kind of thing. Over the years, Congress has kept Band-Aiding it.”

Cook said Apple pays US$6bn in US taxes, “more than anyone else.”

The Apple CEO also suggested a plan whereby Apple would pay even more but in exchange would repatriate all the cash it has offshore.

“We have no special deal with the Irish Government,” Cook said.

“I believe, based on the hearing that simplistically the thing that is being debated for a company like Apple or any other company that sells things cross the world and develops them in the US, (is that) some people believe that all the profits around the world should accrue to the US and be taxed here.

“The IRS (Internal Revenue Service) has no problem with a system that allows profits for money overseas to be taxed in other jurisdictions.”

Cook said that while he was happy Apple is part of the reform process, he was worried that decisions may be made that might not be logically thought through.

‘Apple still has a grand vision for TV’ – Tim Cook

While Cook was tight-lipped about new products on the way, he confirmed Apple will be rolling out the future of iOS and OSX at its Worldwide Developers Conference (WWDC) in California next week.

On the question of the fabled television that may (or may not) one day come from Apple, Cook said more than 13m units of the existing Apple TV set-top device have been sold so far, half of them in the past year.

He said the current TV experience is not great and that TV continues to be an “area of great interest” to Apple.

Cook added that the existing TV model is outdated and the experience has not been brought up to the current decade.

“There is a very grand vision,” Cook said enigmatically.

The Apple CEO was also tight-lipped about wearable computers and rumours of a forthcoming Apple watch. He admitted he wears a Nike FuelBand but described Google Glass as unlikely to be a mass-market item.

Cook also predicted that the entire sensor field is going to explode. “With the arc of time it will become clearer.”

In terms of iOS and the forthcoming look and feel of the mobile operating system, Cook said that Apple’s senior vice-president of industrial design Jony Ive has been key to the forthcoming update and said that having him design both the software and the hardware is critical because there needs to be a blend of hardware, software and services.

Cook also noted that the technology giant sold 85m iPhone devices in the past quarter and more than 42m iPad devices.

Customer satisfaction numbers, he said, are off the chart and outpace its market share. “I look at that and say I feel pretty good.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years