Apple to repatriate overseas cash pile next year, says Cook
Apple expects to pay billions of dollars of extra taxes in the US next year when it brings home the offshore cash pile at the centre of its row with Brussels, the technology company's chief executive said on Thursday.
Tim Cook told Ireland's national broadcaster RTE that Apple had set aside “several billion dollars for the US for payment as soon as we repatriate” some or all of its $215bn in overseas cash.
“Right now, I would forecast that repatriation to occur next year,” he said. Mr Cook has previously said that returning those funds to the US was contingent on a new American president introducing corporate tax reform that would lower the current 35 per cent rate.
The row between Apple and Brussels over a €13bn tax penalty escalated on Thursday, as Mr Cook called the European Commission's decision “invalid” and “crap” and urged the Irish government to appeal.
Dublin was ordered on Tuesday by the commission to claw back up to €13bn from Apple after its tax arrangements in Ireland were judged to constitute illegal state aid. Apple has said the funds will be paid into escrow until an appeal is heard.
Mr Cook lashed out at the commission’s claim that Apple paid only 0.005 per cent tax in Ireland in 2014, telling the Irish Independent newspaper that it was “total political crap”, adding: “They just picked a number from I don’t know where.”
The correct figure was $400m, he said.
But the commission stands by its figures. One person who has seen the Apple ruling said that $400m was significantly higher than the total Irish corporate tax liability of the US group’s Irish subsidiaries. This person speculated that Apple reached the figure by including other forms of taxation, not just corporate tax, but Apple confirmed the $400m was made up only of corporate income tax paid to Ireland in 2014.
Mr Cook used his interview with RTE to press the Irish government to appeal against the EU decision.
“It is important the [Irish] government stands strong on that because future investment for business really depends on a level of certainty,” he said.
Margrethe Vestager, the EU competition chief, responded to allegations from Apple that Brussels had overstepped its jurisdiction in its pursuit of the iPhone maker, and defended its use of state aid rules, which some have called controversial.
“It is a question of taxes being paid in the European jurisdiction on profits being made or at least recorded here,” she said. “It is, I think quite obviously, a European matter and a matter for EU state aid rules because it has to do with European issues.”
In response to Mr Cook’s charge of having “just picked a number”, the Danish politician called on Apple and Ireland to allow the release of the confidential ruling so that people could see the detail behind the commission’s arguments.
“If it was up to me, the confidential version would have been published yesterday,” said Ms Vestager. “I hope that Apple and Ireland will be as open and co-operative as possible in order to let us publish the decision as fast as possible. It is very good for everyone to see our reasoning.”
Separately it emerged on Thursday that other European countries are looking closely at the way Apple and other big US companies book sales and profits in Europe.
While declining to comment on any specific inquiries into Apple, Michel Sapin, the French finance minister, expressed his “concern” at how the company moved profits through Ireland.
“A big part of this €13bn sum is due to the fact that Apple and others have very advanced fiscal optimisation schemes that enable them to have profits [generated] in countries like France to be taxed in Ireland. This concerns us,” he said. “We're doing a targeted work on very big companies so that they can pay their taxes in France on profits they generate in France.”
Despite the commission's ruling, Mr Cook restated Apple’s commitment to Ireland, pointing to plans to build an $800m data centre and expand its Cork facility. He said those investments were “moving forward per plan”.
“We are not going to let an invalid ruling — a politically based ruling — affect our commitment to Ireland,” he said.