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iPhone maker says European Commission’s 13 billion tax ruling puts investment, job creation at risk.
Apple has defended its record in Ireland after the European Commission said the iPhone maker owed the government there €13 billion in unpaid tax.
An investigation launched by Brussels in June 2014 on Tuesday concluded that the tax arrangements of two Apple subsidiaries incorporated in Ireland – Apple Sales International and Apple Operations Europe – minimised their tax exposure by attributing the majority of their profits to a head office that did not reside in any country and only existed on paper.
The Commission said this practice violated the EU’s state aid rules, and the Irish government must now recoup €13 billion plus interest in back taxes.
"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," said Apple CEO Tim Cook, in an open letter on Tuesday.
He accused the Commission of rewriting Apple’s history, ignoring Ireland’s tax laws and upending the international tax system.
"It is effectively proposing to replace Irish tax laws with a view of what the Commission thinks the law should have been," Cook said.
Apple founder Steve Jobs opened the company’s first European factory in Cork, Ireland in 1980.
"At the time, Cork was suffering from high unemployment and extremely low economic investment. But Apple’s leaders saw a community rich with talent, and one they believed could accommodate growth if the company was fortunate enough to succeed," said Cook, who became Apple CEO in 2011.
He warned that the European Commission’s ruling has serious, wide-reaching implications.
"The most profound and harmful effect of this ruling will be on investment and job creation in Europe," he said. "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."
Apple said it plans to appeal the decision.
"We are confident that the Commission’s order will be reversed," Cook said.
