As many newspapers have noted, Tim Cook, the chief executive of Apple, has dismissed the EU's tax ruling on his company as “political crap”.
This could, of course, be dismissed as a facile aside, but I do not think that would be appropriate. In the context of the Apple tax decision this comment has much more to it than that. In fact, it could be argued that it goes right to the very heart of what the whole issue is about.
Apple wants to live in a world where such things as tax laws ('political crap', if you like) do not apply to it. And Tim Cook is very angry to find that someone dare suggest that he and his company may be subject to the law like all the rest of us.
The EU has to prove that is the case: if they don't we can forget democracy and forget the nation state. We will just be ruled by companies. And thank you very much Tim Cook, but however good your product might be I really don't like your approach to government.
In fact, I have a word for it. It's crap.
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Actually Richard we will start have the nation state with all its pomp and ceremony. It performs a useful role in distracting attention from the where the real power lies. Politicians will still talk about “independence” meaning in the case of Ireland – do not do anything to offend Apple.
@Richard Murphy – How can have Apple paid a 26% tax globally(mentioned here – https://www.theguardian.com/business/2016/sep/01/political-crap-tim-cook-apple-tax-ruling) when every country has different rates? It doesn’t make sense. Richard, can you please shed some light on this?
Also are you aware of Ambrose Evans Pritchard’s view on this? http://www.telegraph.co.uk/business/2016/08/31/apple-travesty-is-a-reminder-why-britain-must-leave-the-lawless/ He says that the EU competition cheif has exceeded her powers with her ruling. Would be interesting to know your more informed opinion on this.
Apple’s accounts are opaque: answers on its tax would only really be clear if we had country-by-country reporting
That said it does report significant profits in the US where it pays at a rate of 35%. And it saved $6bn by not remitting profits from Europe in 2015. It says it has a back tax bill owing of at least $26 billion: it could be rather more
And Ambrose is just making stuff up
I freely admit I have no idea whether the detail of the EU decision is correct or not – there is an interesting article in the Economist which suggests it is based on “innovative” interpretation of transfer pricing rules but sadly too brief to get into detail.
At its heart the decision is part of a decades long war between EU Commission and Member states about who runs tax affairs. Using state aid rules to attach member country tax laws is not particularly innovative, there are many examples of new UK tax laws only being implemented once EU state aid approval had been obtained, what is unusual is that in the Apple case EU Commission is not suggesting that the Irish tax laws are wrong but that the Irish tax authorities applied them wrongly. To put it another way the EU Commission believes it, and therefore not the Irish courts, should be the final judge on how the civil service in member states apply local law. That is truly innovative.
The reality is that the EU Commission has long wanted tax affairs to be under its charge not member countries. If you believe that the EU should morph into a unitary political entity the EU Commission’s desire is completely logical. However, that is a matter which should be subject to political (ie democratic) agreement at government level
This battle was won in the 90s with the EU Code of Conduct on Business Taxation
I think this provides all the required precedents, including consent