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Tim Cook defends Apple in EU tax case

Whatever your view of the tax spat between Apple, Ireland and the EU this week, you have to hand it to Tim Cook; there aren't many CEO's who would step in front of the cameras (or microphones, if we're being persnickety) to defend the world's richest company on its somewhat-questionable tax operations when it could simply be handed off to his PR team, but that's exactly what he's done.

The accusation, made by the European Commission (an arm of the EU) is that Ireland has done a back-door deal with Apple, giving it a special rate of corporation tax in return for Apple servicing much of its European operation from Cork.

Tim first issued a statement via press release on 30th August on the Apple website, saying;

"In Ireland and in every country where we operate, Apple follows the law and we pay all the taxes we owe."

Following the press release, in an interview with the Irish Independent last night, Tim reacted with an air of frustration at the assertion that Apple has paid an effective tax rate of just 0.005%;

"It's total political crap, they just picked a number from I don't know where. In the year that the Commission says we paid that tax figure, we actually paid $400m. We believe that makes us the highest taxpayer in Ireland that year."

Tim also confirmed that he believes, after speaking with other people in leadership positions around the world, that the European Commission may be acting under the influence of anti-US sentiment;

“People in leadership positions in several countries tell me that this (anti-US sentiment) is the agenda. I don’t know where that comes from. But what I feel strongly about is that this decision was politically based, of that I’m very confident. There is no reason for it in fact or in law.”

It's easy to see why the Irish tax deal would be favorable to both Apple and Ireland, and why the EU (which takes a small slice of taxes raised in Ireland) would feel irked that Ireland has effectively undercut its other members tax rate whilst simultaneously reducing the amount of revenue that the EU receives as a result.

The European Commission estimates that Apple owes Ireland €13bn. Given that the EU receives around 0.7% of a member states' gross national income, the EU would benefit to the tune of €91m if Apple settles the bill, so it's clearly a fight worth fighting. The problem for the EU is, Tim Cook is up for it.

This morning, Tim came out fighting for Apple again in another interview, this time with national broadcaster RTE;

"It’s maddening. It’s disappointing. It’s clear that this comes from a political place. It has no basis in fact or in law, and unfortunately it’s one of those things we have to work through."

"When you’re accused of doing something that is so foreign to your values, it brings out an outrage in you, and that’s how we feel. Apple has always been about doing the right thing."

Apple, a legally well-armed behemoth, isn't used to backing down on legal issues, but this time it's fighting the European Commission, who are equally adept at legal proceedings on a grand scale. It's difficult to imagine who will back down first or in what decade we will see the final appeal on the issue.

But for now, kudos at least to Tim for doing more than is strictly necessary in defending Apple's position on the matter.

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