Even moving Apple's cash pile home won't halt E.U. tax investigation

Even moving Apple’s cash pile home won’t halt E.U. tax investigation


Apple can't do anything in the face of E.U. investigation.
Photo: Ste Smith/Cult of Mac

Even bringing Apple’s sizable cash pile back to the U.S. wouldn’t stop the E.U. from investigating the company’s Irish tax arrangements, claims E.U. competition commissioner Margrethe Vestager.

“Whether or not Apple wants to repatriate part of their un-repatriated profits is purely up to Apple and is of no concern [to] our case work,” she told reporters after a recent meeting in the U.S. with the Obama administration.

As the Financial Times reports:

“Apple’s accounts show that it has earmarked about half of its overseas cash for repatriation to the US. In October’s annual report, Apple estimated a deferred tax liability of $30bn related to a cumulative total of $91.5bn in foreign earnings. As a result, Apple’s advocates in Washington argue that European governments have no rights to those funds.”

Margrethe Vestager has recently been attacked by U.S. Treasury secretary Jack Lew for singling out American companies for its crusade against alleged tax dodgers. It seems that the fresh meetings in the United States did nothing to settle these points, either. “I think it’s very much the same,” Vestager said.

Vestager admits she has no idea how much Apple could owe if it is found to have benefitted from an unfair tax arrangement with Ireland. “I have no magic numbers,” Vestager said. “The case is not done yet and therefore it is still very early days because only when we finalise our investigation will we know.”

As well as Jack Lew, the E.U. competition commissioner has previously been criticized by the U.K.’s mayor of London Boris Johnson. In an article on Apple’s tax avoidance, Johnson described Vestager as a, “crop-haired … Left-wing [figure] … straight out of that Scandi-noir serial Borgen,” who is fixated on U.S. multinationals.

Apple has always been insistent that it pays all the tax that it owes. During last year’s “Inside Apple” episode of 60 Minutes, Tim Cook labelled reports that Apple doesn’t pay its taxes as, “total political crap.” In the same interview he also railed against the idea of U.S. tax codes built for the industrial age instead of the digital age.

“It would cost me 40% to bring [Apple’s overseas cash pile] home, and I don’t think that’s a reasonable thing to do,” Cook argued.

Apple’s Chief Financial Officer Luca Maestri has also said that, “if there is a fair outcome of the [European Commission] investigation, [Apple should pay] zero” extra tax.


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