Apple boss dismisses 'political' tax ruling

Tim Cook Image copyright Reuters

Apple's chief executive, Tim Cook, has dismissed the ruling by the European Commission as politically motivated.

He then went on to show he's no slouch as a politician himself.

In comments in Irish media, Mr Cook circled his own wagons in what is undoubtedly a political as well as a financial tussle.

First there was the personal touch. He spoke of the outrage he personally felt at being charged with conduct so "contrary to our values".

Then he tried to shore up the support of the Irish government by talking about 37 years of achieving great things together through some thick and thin times.

He described a time in 1998 when Apple almost closed its Cork facility before he realised how great its Irish employees were.

Just in case anyone missed the fact they were on the same side he repeated, "Apple hasn't done anything wrong and the Irish government hasn't done anything wrong".

Image copyright PA

Lastly, there was a bone thrown to the US government with a promise to repatriate "several billion dollars" to the US next year - lest we forget that in the minds of US politicians, if anyone is owed back taxes, it sure as hell ain't Ireland.

He knows that back home in the US, his bafflement at European officials exacting retrospective taxes on American companies will be shared.

No 'sweetheart' deal

It was a skilful and very nuanced performance, but one which obscured a few key truths.

He claimed that Apple paid tax at a rate of 26% around the world, that isn't the whole story.

Apple works out its tax rate as if it had paid taxes due in the US at a rate of 35%.

But the actual payment of those taxes is deferred - till when, nobody knows.

Maybe until US taxes come down or some special tax amnesty is agreed to repatriate hundreds of billions that Apple and others keep off US shores in the tax equivalent of outer space.

In fact, the scramble to avoid paying tax at 35% is the reason the whole structure exists in the first place.

Tim Cook flatly denied that Apple had any kind of sweetheart deal - anyone else could have parked money in Ireland untaxed for years if they had just asked he said.

That is a bit like saying any pub team could win the FA Cup - in theory they can, but without the Pogbas and Ibrahimovices of the tax lawyer world, they can't.

The European Competition Commissioner, Margrethe Vestager, has enormous powers thanks to her personal role in determining what constitutes illegal state aid.

She has used them to the full with this bold move against one of the world's most powerful companies. She has also picked a very wily political opponent.

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