Apple CEO Cook lobbies EU antitrust chief over Irish back taxes

“Apple boss Tim Cook made a surprise visit to Brussels on Thursday to lobby the EU’s antitrust chief weeks before she is set to rule on a landmark case that could force the California-based technology company to pay billions in underpaid taxes to Ireland,” Christian Oliver reports for The Financial Times. “”

“The EU’s probe into Apple’s Irish tax arrangements has become one of the most politically-charged cases pursued by Brussels since it took on Microsoft two decades ago,” Oliver reports. “Coupled with its antitrust case against Google, it has sparked accusations in Washington that European commissioner Margrethe Vestager is unfairly targeting the US technology sector. A spokesman for Ms Vestager confirmed she held a ‘private meeting’ with Mr Cook, but gave no further details.”

MacDailyNews Take: Hopefully, Cook is playing the hardest hardball possible.

“Dublin is known to be angry about what it believes is unfair treatment of Apple, and its officials worry Ms Vestager’s staff has changed their legal arguments in the run-up to a decision on whether to order a repayment of back taxes,” Oliver reports. “Mr Cook’s personal intervention is a sign that Apple is worried about the direction of Ms Vestager’s inquiry, especially after she ruled in October that Luxembourg and the Netherlands had provided improper tax benefits to the Italian carmaker Fiat and the US coffee shop chain Starbucks — the first such rulings in her expanding corporate tax probe. Those cases are now being appealed… [Critics] accuse the commission of using the state aid weapon retroactively to trample over tax arrangements that were made in full accordance with Irish law.”

Read more in the full article here.

MacDailyNews Take: As we wrote last November:

Apple has repeatedly and confidently stated that they didn’t do anything that was against the law. Therefore, unless the EC tries to change the law retroactively, if that’s even possible, or tries to collect taxes retroactively in some other fashion, Apple is in the clear.

“There was no special deal that we cut with Ireland. We simply followed the laws in the country over the 35 years that we have been in Ireland. If the question is, was there ever a ‘quid pro quo’ that we were trying to strike with the Irish government – that was never the case. We’ve always been very transparent with the Irish government that we wanted to be a good corporate citizen… If countries change the tax laws, we will abide by the new laws and we will pay taxes according to those laws.” – Apple CFO Luca Maestri

Think Ireland’s corporate tax is unfair? Wave goodbye to Apple and thousands of jobs if it’s changed – November 14, 2015
Apple announces 1,000 new jobs in Ireland as EU tax ruling nears – November 11, 2015
Apple tax probe won’t hurt Ireland, Finance Minister Noonan says – October 5, 2015
EU’s Vestager says will not complete tax inquiries of Apple, others in second quarter – May 5, 2015
Apple warns of potential ‘material’ financial damage from European tax probe – April 29, 2015
Apple may have to pay Ireland 10 years of back taxes – April 30, 2015
Ireland’s Prime Minister: Apple has nothing to fear from end of ‘Double Irish’ tax avoidance strategy – November 4, 2014
Apple says it may lose Irish tax break – October 31, 2014
Ireland to end tax lures that drew U.S. firms – October 14, 2014
EU tax probe spotlights Ireland’s allure for multinationals – October 13, 2014
EU watchdog to give reasons for inquiry into Ireland’s tax treatment of Apple – September 29, 2014
European Commission accuses Apple of prospering from illegal Irish tax deals – September 28, 2014
EU threatens expanded probe into Ireland’s tax practices regarding Apple, Googles, other companies – June 20, 2014
EU’s investigation of Apple’s taxes isn’t going to cause the company any problems – June 13, 2014
EU launches tax avoidance investigations on Apple, Starbucks, Fiat – June 11, 2014
Not in Taxes anymore: On site at Apple’s famous Irish ‘headquarters’ – November 2, 2013
Regan: U.S. tax code spurs loveless foreign corporate ‘marriages’ – May 13, 2014
Ireland to close Apple’s tax loophole, but leave bigger one open – October 15, 2013
G20 think tank OECD proposes blueprint for global crackdown on tax avoidance – July 19, 2013
Thomas Sowell on Apple, corporate taxes, and ‘the road to serfdom’ – May 28, 2013
Taxing Apple just taxes you – May 24, 2013
Don’t tax Apple, tax its shareholders – May 24, 2013
If Apple paid more tax, we might pay less or something – May 22, 2013
Apple CEO Tim Cook pounds another nail into the Keynesian coffin – May 22, 2013
Apple CEO Cook makes no apology for company’s tax strategy – May 22, 2013

[Thanks to MacDailyNews Reader “David E.” for the heads up.]


  1. On the subject of taxation, the world has a serious problem, but nowhere is that problem more pronounced than in America.

    Five years ago, 388 richest people in the world had the same personal wealth as the poorest half of the world’s population (over 3.5 Billion people). Today, that number is 62, and they are mostly white men. The few people that are between them richer than the poorest half of the entire planet can fit on a single bus. During the same five years, the wealth of the poorest half of the planet dropped by 40% (!!); the richest half (those 62) got richer by 35%. And most of this disparate growth happened in America.

    In the 50s, the richest Americans were paying the 91% in taxes; the period was known as a major economic boom. In the 60s and 70s, the tax rate for the richest Americans went down to 70%, then to 50%, then Reagan took them all the way down to 28%. In the early 90s (Clinton years) they went up to 40%, to be again lowered in 2000s (Bush Jr. years) to 35%. As the top tax rate went down, the rich got significantly richer (in real dollars), while the middle class (as well as the poor, of course), actually got poorer. The average middle class income, in real dollars, kept falling since the all-time high (adjusted for inflation) in the 70, with a brief boom in the 90s.

    The data shows quite convincingly that tax cuts for the rich, under the ‘trickle-down economy’ excuse, actually NEVER helped those who were down. They only helped rich get richer. None of the tax savings by the rich ended up invested in meaningful job creation. The only times when jobs did grow is when government programmes helped create them (during Clinton or Obama years).

    American tax system that so powerfully favours rich is simply obscene. Almost not a single rich American actually pays the nominal tax rate; instead, the effective actual taxes end up being below 20% of their taxable income. When you generate $20 million per year in revenue, and pay $4 million in taxes, you are left with $16 million. When an ordinary American makes $100,000, and pays $35,000 in taxes, he is left with $65,000 to feed the family, provide shelter, save for retirement and college, and hopefully, if anything is left, take them for a vacation or two. It is simply mind boggling that such disparity is allowed to exist.

    1. I wholeheartedly agree with you, Predrag. You stated the situation very well. But I expect that you will soon get flamed by the diehard right extremists on this forum, so I will offer a preemptive strike.

      This is not a matter of “stealing” from the rich or “penalizing” them, any more than conservatives would say that the current system does the same to the poor. And the sound bites and scare tactics regarding “income redistribution” are both meaningless and ridiculous. Any taxation policy and many other government policies affect the distribution of income. It is when you bring in the viewpoint of the wealthy (or the poor or the middle class) that certain income redistribution policies become good and other ones become bad. Over the past four decades the rich have asserted their political power to skew the system in their favor, and the wealth statistics bear this out.

      The conservatives and rich like to talk about the “size of the pie” and not the “size of the pieces.” But they are both important. And the conservative economic policies that have been gradually enacted over recent decades tend to focus more on increasing the size of the piece that goes to the wealthy than to increasing the size of the pie to the benefit of everyone. The pie may be increasing, but the leftover slice keeps shrinking in real terms.

      In my opinion, taxation policies that are good for the poor and middle class can also be quite good for the wealthy, because a vibrant middle class does tend to grow the pie. Trickle down economics failed miserably – the economic growth could never offset the reduced tax percentages over the long term. Trickle-up economics, however, just might work.

      1. You know what? I’m sick of reading liberal bullfeathers.
        They blather on about ‘conservatives’ this and ‘conservatives’ that but conveniently forget that we have an amoral liberal (same thing) numbers guy in charge at Apple and almost every major American corporation.

        Cooks wages in 2014, according to Business Insider, was over ONE HUNDRED MILLION DOLLARS.
        How the blank can you blame conservatives for what is a liberal problem?

        Who sent all of the manufacturing jobs to **communist** China?
        Who is responsible for the brain drain and the relentless dumbing-down of what is laughably referred to as the American education system?
        Who decided doing dope was better than teaching kids right from wrong?
        How do we have 2.2 million people in prison and another 5 million either on parole or probation? When did all that start?
        The liberal 60s.
        What do WorldCom, Enron, Freddie Mac, Fanny Mae, HealthSouth, Arthur Andersen, and the rest have in common?
        All run by liberals.

        Google, run by liberals.
        M$, run by liberals.
        Amazon, run by liberals.

        Yeah but conservatism is the problem. O_o
        What planet are you people living on?!

        One Star for liberalism.

        1. That is most ignorant, disinformed, absurd and incorrect post, where practically every single statement is false. I’m not sure who is the source of your information, but it seems patently wrong.

          The tax system in America, brought to its current state by the consistent assault from the American rich, through the conservative political machinery, is profoundly unfair, bordering on feudalism.

          More than half of all Americans cannot afford to save any money. Essentially, they spend everything they earn (minus taxes). Reducing their tax burden allows them to spend more, which stimulates economy and generates jobs. Increasing the tax buden on the rich will NOT suddenly make rich lazier and cause them to work less and earn less. They will continue to amass their fortunes as much as they did before; the only thing different will be the pace of their enrichment. With a greater tax burden, they will simply become even richer at a slower pace, but their rich lifestyle will not be affected in any meaningful way. But most importantly, they will finally be contributing their equal (and fair) share to the society.

      2. It is quite simple, really.

        When you reduce a rich person’s tax burden from 50% to 30%, (from my example above, from $10M to $6M), his remaining part goes from $10M to $14M. In order to sustain a lifestyle, no matter how lavish it may be when one is rich, takes considerably less than $10M per year. Additional tax widfall of $4m will never be spent. For most wealthy people, any leftover capital at the end of the year is reinvested into securities or similar equivalents, none of which generate any additional meaningful jobs.

        When a middle-income person gets a 10% tax break (say, from 35% to 25%), this translates (in the example above) into extra $10,000 at the end of the year. Most of this money ends up spent, rather than put away for a rainy day. Inserting that much money back into the economy will invariably have immediate positive effect.

        1. Lets quit beating around the bush Predrag, you want rich white people murdered and their wealth confiscated. Your comrades throughout history, especially in the 20th century, spewed the same bile about “fairness” while committing genocide against millions of people, many of them white men. In the meantime they personally amassed unprecedented power and oppressed virtually everyone they didn’t kill.

          1. Yes, let us quit beating around the bush. You would much rather if all the middle-class and poor people would simply give up on trying to earn living and just work for the rich people like they did in the good old feudalism.

            I’m not sure who are the ‘comrades’ that you are referring to; I don’t belong to any such group, nor does anyone around me. None of what you seem to talk about is relevant to the fact that the rich in America got richer and richer, not because they were working harder and earning more money, but because they were taxed lower and hoarded their money; and the rest got poorer and poorer, not because they were working less, but because they were getting paid less and less.

            I’d really be curious to hear what you would consider to be fairer than what I’m suggesting (higher taxation for rich, and lower for poor, vs. the current system, where the rich pay lower taxes than the poor).

  2. Ireland is in the EU. EU law sits above Irish law. Apple may have a deal that is legal in Ireland but is not legal as far as Brussels is concerned.
    Apple should pay Corporation Tax in each EU member state on the profits it makes in that country. That would be the most equitable solution for all concerned.

    1. If only it was that simple. Large corporations set up so many shell companies around the world it would make your head spin. A product that cost $2 to make in the USA gets shipped to a sister division of the same company in France and, voilà, magically those parts are suddenly worth 200 euro a piece. Magic occurred in the shipping container in the mid-Atlantic.

      And we haven’t even gotten into “intellectual property” yet, where the real money is. Google Advertising in Ireland gets paid 5 or 10 times to produce an advertising campaign compared to what a local California ad firm would charge. Why? Because it looks like a business expense, and it’s just a way to funnel money across the ocean.

      I have no sympathy for Apple or any other company that employs such blatantly unfair and immoral yet not-yet-outlawed business practices. These are just a few ways that corporations kill small businesses by tilting the playing field so far in their favor that the entrepreneur can never compete, no matter how good he is.

  3. [Critics] accuse the commission of using the state aid weapon retroactively to trample over tax arrangements that were made in full accordance with Irish law.

    Again, the EU has a specific mandate of ‘no ex poste facto’ laws, meaning that they can’t make something out of the past suddenly illegal. If they pull that move on Apple, then Apple will trample them on appeal.

  4. Actually it is simple. If a company profit shifts to avoid tax or sets up shell companies to profit shift then it’s tax avoidance.

    It’s a matter of having the right laws in place and the will to move on companies that undertake these ventures.

    In my country, Australia, The Australian Taxation Office has just appointed the a new head of the organisation who designed “tax minimisation” schemes for companies that avoided tax. And he’s going after these companies.

    The previous treasurer presided over a regime that sacked staff that were involved in investigations of such schemes.

    It’s all a matter of willpower, together with a just taxation scheme that encourages productivity, entrepreneurship and hard work.

    Governments needs to “oil the wheels” to enable this to happen and when necessary provide incentives.

    The rest is all about providing the infrastructure, education, health and transport systems together with a sound defence policy to enable all of this to happen. And that’s called good governance.

  5. MDN: Try not to think of aircraft carriers in every US opportunity for negotiation: it doesn’t go down well. There is no “hardball” option for Apple here. What do you suggest, they threaten to pick up their bat and ball and go home?

    The issue here is not whether Apple intentionally cheated on their taxes, but whether the Irish government and Apple’s tax advisers got it wrong. The latter seems likely.

    The bottom line is that Apple did not pay a reasonable tax rate in any of the European countries in which it operates. It managed this by shifting profits to low-tax regimes by using constructions which they thought were legal, but now appear to have been illegal.

    Europe wants US companies to pay their fair share of local taxes. The US tax system is designed, by Congress, to encourage US corporations to pay little or nothing overseas and as much tax as possible at home.

    The worm has turned.

  6. I agree except that ignorance is no defence in jurisprudence. It should also be noted that at the last G20 meeting the US signed up to international tax reform to overcome this problem.

    So far the US government at a presidential and congressional level has done SFA in developing legislation to address this issue. The result is a second best option.

    First governments and political parties are hauling their collective arses into senate inquiries and the Australian taxation Office in this country is going after them.

    Second, pre-existing legislation is being altered to go after the offending companies.

    Frankly, and as a long term Apple user, I’m disgusted over the amount of tax they have been avoiding. And don’t think it’s just Apple because you can add the names of Google and Microsoft to the list (to name a few).

    Those revenues are needed for infrastructure, schools roads and rail. The money doesn’t just grow on trees it comes from hard working individuals and equally hard working companies.

    Then there’s the issue of businesses that don’t try to avoid taxation. Is it fair to them? Give me a break!

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