Apple’s tax situation in Europe is currently the subject of an E.U. investigation — and public opinion hasn’t been helped too much by Google recently agreeing to pay what many view as a derisory sum of £130 million ($185m) in U.K. back taxes for the past ten years.
But Cupertino has an unexpected champion in the form of tousle-haired London mayor (and possible next Prime Minister) Boris Johnson. Kind of.
Over the weekend, Johnson wrote an article for the U.K.’s Telegraph newspaper, entitled “We All Want Apple to Pay More Tax.”
With a headline like that, it’s slightly surprising that Johnson then dedicates a large part of the ensuing article to defending Apple’s tax practices — saying that Apple isn’t actually doing anything wrong, and haranguing the “crop-haired … Left-wing” competition directorate in the European Commission, Margrethe Vestager, who he describes as being, “straight out of that Scandi-noir serial Borgen.”
Johnson writes that:
“A part of me that sides strongly with Tim Cook and Apple – or at least can see his point of view. It is absurd to blame the company for ‘not paying their taxes’. You might as well blame a shark for eating seals. It is the nature of the beast; and not only is it the nature of the beast – it is the law. It is the fiduciary duty of their finance directors to minimise tax exposure. They have a legal obligation to their shareholders.
Tax is not paid on the basis of what ‘feels right’ either to public opinion or to politicians. It is not some eleemosynary contribution. It is not as if we are all in church, and watching beadily to make sure that Tim Cook puts his £50 note into the collection basket. Tax is paid, and must be paid, in accordance with the strict requirements of the system.”
He then goes on to attach the “crusading Danish commissioner” for taking issue with Apple’s Irish tax affairs, which he argues has nothing to do with the E.U. at all.
“The paradox of this whole case is that the Irish and Apple are on the same side. If Margrethe the Commissioner makes Apple give Dublin $16 billion in back taxes, that will actually be against the wishes of the Irish government.
The Irish decided they wanted to go for an ultra-low corporation tax, at 12.5 per cent. It was their sovereign ambition to attract the HQ of Apple and others. They wanted Irish taxi drivers to have the honour of ferrying Apple executives around, and they wanted Irish waitresses to snaffle their huge tips. The EU Commission is partly excited by the chance to bash a corporate American giant; but mainly it is a chance to attack tax arbitrage between member states – to move ever closer towards uniformity and away from a spirit of healthy competition between jurisdictions.”
As anyone who follows U.K. and European politics will know, there’s more to this story than just Apple — but it’s still one of the better pieces I’ve seen written about this topic. I have yet to read an impassioned defense of the idea that corporations like Apple and Google should pay such a tiny fraction of the tax that other businesses do, simply because they’re structured as multinationals with the clout to agree super-favorable terms.
With that said, criticizing Apple for taking advantage of legal loopholes wreaks of either a) lack of understanding of how companies and tax laws work, or b) lazy journalism looking to cram Apple into the headline as an easy villain.
Do you agree or disagree with Boris Johnson’s take on the Apple tax deal? Leave your comments below.