Tax ruling will hurt investment in Europe, says Apple CEO

Tim Cook publishes letter claiming that the European Commission's £11bn ruling threatens every company in Europe

Apple CEO Tim Cook has issued an open letter slamming the European Commission’s decision, after it was ordered to pay €13bn (£11bn) in back taxes to Ireland.

After a a three-year long investigation, the commission concluded that the tax arrangement between Apple and Ireland was illegal, and instructed the tech giant to hand £11bn over to Dublin – nearly double the firm's net income for the last quarter.

Both Apple and the Irish government deny any wrongdoing.

“As our business has grown over the years, we have become the largest taxpayer in Ireland, the largest taxpayer in the United States, and the largest taxpayer in the world,” Cook wrote in his letter.

“Over the years, we received guidance from Irish tax authorities on how to comply correctly with Irish tax law — the same kind of guidance available to any company doing business there. In Ireland and in every country where we operate, Apple follows the law and we pay all the taxes we owe.”

Cook argues that the EC is rewriting the law and retroactively applying it.

“The European Commission has launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the international tax system in the process,” Cook wrote. “The opinion issued on August 30th alleges that Ireland gave Apple a special deal on our taxes. This claim has no basis in fact or in law. We never asked for, nor did we receive, any special deals.”

“We now find ourselves in the unusual position of being ordered to retroactively pay additional taxes to a government that says we don't owe them any more than we've already paid.”

The US government has jumped to defend Apple, although its motives are somewhat nefarious. With major tax reforms on the horizon in the States, if Apple, or any other US multinational for that matter, is forced to pay back taxes within the EU, the pool of potentially taxable profits sitting in foreign accounts would be severely diminished.

The CEO of the most profitable company in the world said that the EC’s ruling would set a dangerous precedent that could impact companies throughout the EU.

“[The EC] is effectively proposing to replace Irish tax laws with a view of what the Commission thinks the law should have been. This would strike a devastating blow to the sovereignty of EU member states over their own tax matters, and to the principle of certainty of law in Europe,” Cook said.

“Beyond the obvious targeting of Apple, the most profound and harmful effect of this ruling will be on investment and job creation in Europe. 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.”

Ireland has said they plan to appeal the Commission’s ruling and Apple confirmed that they will do the same. 

“We are confident that the Commission’s order will be reversed,” the CEO stated.

Read more on Channel Business Management

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