Cook urges for global corporate tax reform during Irish trip
Changes need to be made to corporate tax systems around the world to make it fairer, Apple CEO Tim Cook urged while backing calls for a global reform of rules dictating how multinational companies pay taxes on profits.
As one of the biggest and most prominent companies in the world, Apple has faced scrutiny with regard to its tax practices. The growth of tech companies alongside Apple, such as Google and Amazon, has led to the increased use of various accounting tricks to reduce the amount of tax to be paid, a trend that has prompted intense criticism.
Speaking at an event in Ireland on Monday, Cook confirmed he was in support of reforms to international tax laws, including those under consideration by the Organization for Economic Cooperation and Development (OECD).
"I think logically everybody knows it needs to be rehauled, I would certainly be the last person to say that the current system or the past system was the perfect system," said Cook according to Reuters. "I'm hopeful and optimistic that they (OECD) will find something."
Some current tax laws allow for companies to apply corporate taxes at rates depending on where they are based, rather than where the source of revenue is located. This sort of concept, which can have names like the "Double Irish" due to the advantageous tax rate, helps cut millions, and even billions, off what is owed by firms to governments.
A famous example of this is Apple's current tax issue with the European Commission, where it was ruled to have been given illegally low rates of tax by the Irish government, sometimes as low as 0.005%. The ruling forced Apple to pay Ireland $14.4 billion in back taxes, a payment that Apple is currently trying to appeal.
Part of the problem is the sheer number of rules to follow, which can be used to a company's advantage. "It's very complex to know how to tax a multinational," suggested Cook. "We desperately want it to be fair."
The OECD's proposals were outlined in October, with initial plans giving individual governments the ability to tax multinational entities more, and targets any firm that earns income from the country, regardless of where the funds are ultimately funneled. Over 130 countries have agreed in principle for the need for reform, with the OECD expected to provide a more detailed outline this month.
Cook is in Ireland to receive an inaugural award for Apple's investment in Ireland, which has occurred for 40 years. Apple's European headquarters is based in Ireland, and the company employs approximately 6,000 workers in the territory.
Global privacy legislation is needed, says Cook
Comments from the Apple CEO also strayed towards privacy rules, with Cook proposing more regulation is required, and needs to go further than the European General Data Protection Regulation (GDPR) privacy laws.
"I think more regulation is needed in this area, it is probably strange for a business person to be talking about regulation but it has become apparent that companies will not self-police in this area," Cook said. "We were one of the first to endorse GDPR, we think it is overall extremely good, not only for Europe. We think it's necessary but not sufficient."
"You have to go further and that further is required to get privacy back to where it should be."
Cook has previously spoken out about the need to enforce data privacy, calling it one of this century's top issues.