Apple CEO calls EU ruling on company's Irish tax bill 'total political crap'

Apple's chief executive Tim Cook describes an EU ruling that it must pay a huge tax bill to Ireland as "total political crap."

Tim Cook says Apple has put aside 'several billion dollars' to pay tax liabilities in the U.S.

'No one did anything wrong here and we need to stand together. Ireland is being picked on and this is unacceptable," an Irish newspaper quotes Apple CEO Tim Cook saying. 'It's total political crap.' (Stepehn Lam/Reuters)

Apple's chief executive Tim Cook described an EU ruling that it must pay a huge tax bill to Ireland as "total political crap," but France joined Germany on Thursday in backing Brussels as transatlantic tensions grow.

European Competition Commissioner Margrethe Vestager dismissed Cook's broadside, saying the demand for a 13 billion euro ($19 billion Cdn) back tax payment was based on the facts.

Washington has lined up with the tech giant, accusing the European Union of trying to grab tax revenue that should go to the U.S. government.

But in Ireland itself, public opinion and the government are divided over whether to take the windfall - which would fund the country's health system for a year - or reject it in the hope of maintaining a low tax regime that has attracted many multinationals and the jobs they create.

Apple has said it will appeal the ruling which Cook attacked in an interview with the Irish Independent. "No one did anything wrong here and we need to stand together. Ireland is being picked on and this is unacceptable," the newspaper quoted him saying. "It's total political crap."

Vestager has questioned how anyone might think an arrangement that allowed the iPhone maker to pay a tax rate of 0.005 per cent, as Apple's main Irish unit did in 2014, was fair.

She said on Thursday that the calculations were based on data provided by Apple itself and evidence presented during hearings on Apple tax issues in the United States.

Asked if she accepted Cook's comments on the ruling, she told a news conference: "No, I will not. This is a decision based on the facts of the case."

Battle lines forming

The battle lines are forming on both sides of the Atlantic. In Paris, French Finance Minister Michel Sapin backed Vestager's view that Apple's Irish tax arrangements amounted to abnormal state aid.

"The European Commission is doing its job," he told a news conference. "It's normal to make Apple pay normal taxes."

German Economy Minister Sigmar Gabriel also supported the Commission on Tuesday. However, Britain — which voted in June to leave the EU — has stayed out of the row, saying it is an issue for the Irish government, Apple and the Commission.

Cook promised to boost tax payments by repatriating billions of dollars in global profits to the United States next year. "I think that Apple was targeted here," he said. "And I think that (anti-U.S. sentiment) is one reason why we could have been targeted ... I think it's a desire to reallocate taxes that should be paid in the U.S. to the EU."

Apple would fight closely with Ireland to overturn the ruling — by far the largest anti-competition measure imposed on a company by the EU — which he said had "no basis in law or in fact".

Profits held offshore

Irish Finance Minister Michael Noonan has insisted Dublin would appeal any adverse ruling ever since the EU investigation began in 2014. However, the cabinet failed to agree on Wednesday whether to accept his recommendation of an appeal.

 Apple was found to be holding over $181 billion ($238 billion Cdn) in accumulated profits offshore, more than any U.S. company, in a study published last year by two left-leaning nonprofit groups, a policy critics say is designed to avoid paying U.S. taxes.

But Cook said part of the company's 2014 tax bill would be paid next year when the company repatriates offshore profits to the United States.

"We provisioned several billion dollars for the U.S. for payment as soon as we repatriate it and right now I forecast that repatriation to occur next year," he told RTE radio.