Apple GC puzzled over EU Commission’s math

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Apple’s top lawyer is striking back at the European Commission, saying the organisation’s numbers don’t add up, just days after CEO Tim Cook blasted the Commission’s demand for back taxes as “total political crap”.
 
In an interview with the German publication Frankfurter Allgemeine Zeitung, Sewell questioned how the Commission arrived at its numbers and also explained why Apple is fighting the decision.
 
“We cannot understand where these numbers are coming from. We have paid more taxes than the Commission has indicated,” Sewell said.
 
The European Commission ordered last week that Ireland recoup USD14.5bn in back taxes from Apple. It also alleged the company made illegal arrangements with the Irish government that allowed it to pay essentially nothing in taxes for some years.
 
“We paid tax at the statutory rate of 12.5% tax on profits relating to our activities in Ireland. We don’t understand where the Commission’s figures are coming from,” Sewell said.
 
Furthermore, Apple paid USD400m in corporate taxes in Ireland in 2014 while they also paid USD400m in current US corporate taxes on those profits, he said.
 
As has since been asserted numerous times, the European Commission’s ruling potentially reduces Apple’s profits that can be taxed by the US.
 
“We also accrued several billion in US corporate tax on a deferred basis. To get to this meaningless 0.005%, the Commission completely ignores the fact that the vast majority of these profits were subject to U.S. taxation,” Sewell said.
 
The Apple general counsel strongly denied that the firm’s Irish operations exist only to avoid paying taxes.
 
“We came to Ireland in 1980 when the company was expanding overseas and was looking for an extremely talented and well-trained workforce,” he told the publication. 
 
He noted that when Apple came to Ireland, it was still a “very small company” which started operations with 60 employees. Today , it employs 6,000 people in the country.
 
Sewell also denied Apple is paying relatively low taxes taking into account its enormous profits.
 
“We pay tax on our activity in Ireland at the statutory 12.5%. We are the largest tax payer in Ireland, the largest tax payer in the US and the largest tax payer in the world. We paid $13 billion in tax last year and had a reported global tax rate of 26.4%,” Sewell said.
 
“This isn’t an argument about how much tax we pay, but where we pay it. The European Commission appears to believe that despite the fact these profits are legitimately attributable to our head office in Cupertino and subject to tax on a deferred basis, they should be taxed in Ireland,” he added.
 
Sewell also warned that Europe will become a less attractive destination for overseas investor because of the decision, asking the publication, “Should the Commission reserve the right to decide on the tax policy of your country?”
 
Tim Cook, in an interview with The Irish Independent, said last week that the demand on Ireland to recoup billions in back taxes from Apple is “total political crap”.
 
“This conclusion that the Commission has reached has no basis in law or in fact. So I think it clearly suggests that this is politics at play,” he said.
 
Saying that he thinks “Apple was targeted,” Cook also said that “Ireland is being picked on and this is unacceptable.”

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