Image Source: Flickr (William Murphy)
Apple is on the hook for 13 billion euros (around $14.5 billion in U.S. currency) in back taxes owed to Ireland after the European Union ruled the company had dodged its tax obligations by taking advantage of a loophole. Naturally Apple isn't happy about the ruling. Apple chief executive Tim Cook got so riled up about the situation that he dropped a C-bomp, calling the ruling "total political crap."
"I think we'll work very closely together, as we have the same motivation. No one did anything wrong here and we need to stand together," Cook told Irish Independent in an interview. "Ireland is being picked on and this is unacceptable. It's total political crap."
When the mild mannered Apple boss compares something to fecal matter, you know it's serious business. We're reminded of that scene in Anchorman when Garth Holliday (played by Chris Parnell) is upset with Ron Burgundy (Will Ferrell) and gets as vulgar as his personality allows.
Unlike the movie Anchorman, what's going on here is no laughing matter. The money Apple owes stems from what's referred to as the "Double Irish" loophole. According to the ruling, Apple funneled profits through two subsidiaries, both of which the European Commission said were companies in name only, which allowed Apple to "substantially and artificially" lower its tax burden. The European Commission also said that Ireland's tax laws enables Apple in this regard.
"In fact, the tax treatment in Ireland enabled Apple to avoid taxation on almost all profits generated by sales of Apple products in the entire EU Single Market. This is due to Apple's decision to record all sales in Ireland rather than in the countries where the products were sold," the European Commission said.
Apple sees things differently. From Apple's vantage point, the Commission is trying to "rewrite Apple's history in Europe, ignore Ireland's tax laws, and upend the international tax system in the process." The reason for all that, Apple says, is not because of how much tax Apple pays, but "about which government collects the money."
In the aforementioned interview, Cook adds that Apple was the "highest taxpayer in Ireland" in 2014 with $400 million taxes, quite a bit different than the European Commission's claim that Apple paid a 0.005 percent tax rate that year.
"They just picked that number from I don't know where," Cook said.
Despite what's going on, Cook says Apple will continue with its plan to expand in Cork, noting that the company is "very committed to Ireland." More than just lip service, Cook had plenty of nice things to say about the country and the 37-year "deep relationship" it's had with Apple.
"Every time I go there it brings me such joy. It is an integral part of the company," Cook said. "I feel like Ireland stuck with Apple when it wasn't easy to stick with Apple, and now we're sticking with Ireland."