Tim Cook confident ‘maddening’ €13bn Apple ruling will be quashed

1 Sep 2016

Tim Cook image via Thierry Ehrmann/Flickr

Apple has come out swinging, with its CEO Tim Cook saying his company will appeal the landmark tax ruling issued earlier this week. The Irish Government will too, he said.

“It’s maddening. It’s disappointing. It’s clear it comes from a political base and has no basis in fact.”

So said Apple CEO Tim Cook of the landmark ruling that his tech company must pay the Irish state €13bn in back taxes.

The decision is set to be appealed by Apple, with Cook confident the Irish Government will do likewise, saying the company’s operations in Ireland were “very consistent” and included “no special deals”.

Apple tax Tim Cook

The Tim Cook view

Saying Irish sovereignty, the rule of law and the certainty of law is at stake, Cook thinks “we all need to stand up and fight” for the good of the country, and the EU as a whole.

Speaking to RTÉ, Cook strongly lauded Apple’s Irish workforce, with it currently employing some 5,000 people in Cork, with this figure soon to rise to 6,000. There’s also a new data centre about to break ground in Galway, with some now concerned future investment could be curtailed should Apple be forced to pay up.

Apple’s relationship with Ireland “has not been diminished one iota”, said Cook, calling the company’s Ireland-based employees “world class”.

“I’m pretty confident that the Government will do the right thing. That is to stand up and fight against this overreach.”

The EU view

Earlier this week, Europe’s competition commissioner Margrethe Vestager issued an outcome on the Apple tax issue that was far worse than Ireland had imagined.

Vestager’s €13bn finding, coming after a three-year-long investigation into Apple’s business practices, said the tax relationship between Ireland and the tech giant was “illegal under EU state aid rules”.

“The Commission’s investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years,” she said.

“In fact, this selective treatment allowed Apple to pay an effective corporate tax rate of 1pc on its European profits in 2003 down to 0.005pc in 2014.”

Tax harmonisation

Many agree with Cook that the motivation behind this ruling is political, with some commentators saying an EU-wide ‘tax harmonisation’ is the ultimate goal for Vestager and her political colleagues.

Liza Lovdahl Gormsen, a senior lecturer on law at the University of Manchester, recently wrote an article in The Telegraph saying the EU is using state aid rules as a tool to bring about taxation reform.

“We’re not going to let an invalid ruling, a political-based ruling, affect our relationship with Ireland,” said Cook. “I’m very confident that this ruling, this unjust ruling, will be overturned.”

Main Tim Cook image via Thierry Ehrmann/Flickr

Gordon Hunt was a journalist with Silicon Republic