Tim Cook has rejected the EU’s demand for Apple to return $14.5 billion in ‘unpaid’ taxes in Ireland as having “no basis in fact or law.”
In a letter to customers, the Apple CEO called the move from the EU “unprecedented” and “harmful.” Cook laid out the case that Apple, which has had operations in Ireland since 1980 and currently employees close to 6,000 people in the country, fully abides by international and local law with the rate of tax that is pays in the European country.
“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. The opinion issued on August 30th alleges that Ireland gave Apple a special deal on our taxes,” Cook wrote.
“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,” he added.
Cook acknowledged that tax laws for companies that do business globally are challenging. He argued, however, that by paying its taxes “where the value is created,” Apple has done nothing wrong and it is being unfairly targeted by the EU.
“Nearly all of our research and development takes place in California, so the vast majority of our profits are taxed in the United States. European companies doing business in the U.S. are taxed according to the same principle. But the Commission is now calling to retroactively change those rules,
“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,” Cook said.
Cook explained that Apple supports international tax reform, but it would rather have that debate with impacted countries and their leaders than with the EU. He added that measures should take action going forward, not retroactively as the EU’s directive is.
Apple plans to appeal the decision. Cook said he is “confident” that it will prevail.
You can read Cook’s letter in full here.