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Cook urges for global corporate tax reform during Irish trip

Cook meets the developers of War Ducks in his latest trip to Ireland (via Twitter/@tim_cook)

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.

33 Comments

avon b7 21 Years · 8297 comments

The obvious follow up question for Tim was:

Do you think the financial orchestration that resulted in Apple allegedly paying 0.005% for one year was 'fair', given that, in response to the demands of the EU for Apple to return billions of euros to Ireland, you defended Apple's position by stating that Apple had 'values'? How do Apple's values fit into the claim of it paying 0.005% as a result of financial orchestration?

As for changing the system, he is fully aware that the whole thing is being debated at institutional levels anyway, and has been for some time.

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spice-boy 9 Years · 1454 comments

Few billionaires or corporations will suddenly cough up the billions they have been hoarding from governments and will insist the burden of maintaining society be left squarely on the working class. I applaud Tim's point of view but when the richest man in the world (Bezos) is allowed to exploit tax loopholes written by every Republican dominated government in the past 30 to effectively pay zero taxes, it will be a long journey to right this wrong. 

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spice-boy 9 Years · 1454 comments

avon b7 said:
The obvious follow up question for Tim was:

Do you think the financial orchestration that resulted in Apple allegedly paying 0.005% for one year was 'fair', given that, in response to the demands of the EU for Apple to return billions of euros to Ireland, you defended Apple's position by stating that Apple had 'values'? How do Apple's values fit into the claim of it paying 0.005% as a result of financial orchestration?

As for changing the system, he is fully aware that the whole thing is being debated at institutional levels anyway, and has been for some time.

You're completely correct, Tim seems to be saying "someone has to do something about this" while continuing to pay as little tax as possible. 

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Rayz2016 9 Years · 6957 comments

avon b7 said:
The obvious follow up question for Tim was:

Do you think the financial orchestration that resulted in Apple allegedly paying 0.005% for one year was 'fair', given that, in response to the demands of the EU for Apple to return billions of euros to Ireland, you defended Apple's position by stating that Apple had 'values'? How do Apple's values fit into the claim of it paying 0.005% as a result of financial orchestration?

As for changing the system, he is fully aware that the whole thing is being debated at institutional levels anyway, and has been for some time.

That sounds very low. Got a link for that?  And by a 'link', I mean actual hard, factual evidence?

Hang on. Right, I see; it's the EU ruling. 

Well, if the same tax rate isn't available to everyone then that's not really fair. 

So the EU is saying that no one else in Ireland was getting the same deal.

If everyone is getting the same deal then I don't have a problem, because this 'let the little people pay tax' scheme is precisely what the UK voted for.

1 Like · 0 Dislikes
gatorguy 14 Years · 24718 comments

avon b7 said:
The obvious follow up question for Tim was:

Do you think the financial orchestration that resulted in Apple allegedly paying 0.005% for one year was 'fair', given that, in response to the demands of the EU for Apple to return billions of euros to Ireland, you defended Apple's position by stating that Apple had 'values'? How do Apple's values fit into the claim of it paying 0.005% as a result of financial orchestration?

As for changing the system, he is fully aware that the whole thing is being debated at institutional levels anyway, and has been for some time.

It really has more to do with avoiding country-by-country tax intricacies.  Apple really doesn't want to pay more taxes.

Just like the techs are pushing for "privacy rules" here in the US it's as much for selfish business reasons. Apple doesn't want to deal with Italy individually, then Japan, then Ireland, then France, then Australia. In one of those those they were found to evade taxes (Japan) by doing the same thing they do in other countries around the globe. In another they were threatened with criminal charges and the jailing of executives (Italy) for following the same tax avoidance schemes they use with success in other EU countries.  Consistent rules that apply to all countries is the goal. 

If everyone has their own rules it makes it super tough to avoid breaking someone's tax law someplace. Same goes here re:privacy where none of the techs want to deal with rules unique to California, then those unique to Nevada, and then Connecticut and followed by every other state individually. That almost guarantees that at some point even Apple would be accused of breaking the law in some state. 

One national law is so much easier to comply with, and consistent International Law on taxes is too. 

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