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Business

Apple CEO says EU tax ruling 'total political crap'

Opening sequence

Opening sequence

Business

Apple CEO says EU tax ruling 'total political crap'

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COMING UP:Apple CEO says EU tax ruling 'total political crap'

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Transcript

00:00:00
>> Apple's CEO says an EU demand for 13 billion Euros in back taxes is quote, total political crap. Tim Cook making the comment in the Irish Independent Newspaper on Thursday. He argues, bias against US multi nationals was a factor in the ruling. Reuters Corporate Strategy Correspondent Tom Bergin is in London.
00:00:20
>> Well, one level Tim Cook is correct when he says this is political. Corporate tax avoidance has been one of the big issues politically in Europe for the past five or six years. So realistically the commission is now following really what its political master has wanted it to do.
00:00:35
And the question I guess is, is it crap? I guess what he's saying is that this is some sort of grandstanding, it's a part of a bigger anti-US bias, etc. The commission would respond by that in saying this broader tax investigation we're doing is also looking at European companies.
00:00:53
But of course the reality is when you study this issue and you look at the profit that's been shifting, European companies are not doing what US companies are doing. US companies benefit from a US tax system which creates much, much more opportunities for companies to sheltering in zero taxes jurisdictions or low taxes jurisdictions.
00:01:13
So in a way, it's the US Tax Rules that mean that naturally US companies would be more informal.>> On Tuesday, the AU Competition Commission questioned how anyone could support the arrangements that allowed Apple to pay a tax rate of just 0.005%. That was the bill for Apple's main Irish unit in 2014, but Cook says Brussels picked that number out of nowhere.
00:01:36
He estimates their annual average tax on its profits at 26%. The European Commission insisting the calculations were based on facts and Apple's own data. Now the battle lines are forming on both sides of the Atlantic. The French Finance Minister agrees Apple's Irish tax arrangements amounted to abnormal state aid.
00:01:55
Germany also supporting a commission. Britain though, post Brexit, has diplomatically stayed out of the row.