Apple’s Cook Confident of Tax Fight Victory as Irish Dither

Apple's EU Tax Bill Met by Split Opinion in Ireland
  • CEO Tim Cook says EU’s focus on past taxes not a fair approach
  • Irish government to resume appeal consideration on Friday

Apple Inc. Chief Executive Officer Tim Cook said he’s confident the iPhone maker will win a court fight against this week’s European Union decision forcing it pay Ireland vast tax arrears, as Prime Minister Enda Kenny struggled to unite his government behind an appeal.

The European Commission ruled that Apple must pay as much as 13 billion euros ($14.5 billion) plus interest after Ireland illegally slashed the company’s tax bill, in a record crackdown on fiscal loopholes. The final amount payable could be as much as $19 billion, Irish officials said.

“The decision is maddening and disappointing,” Cook said in an interview with Irish broadcaster RTE, aired on Thursday. “I have faith the right outcome will occur.”

While the world’s richest company vowed to fight a ruling that it benefited from selective tax treatment, the Irish government has yet to make a final decision. The cabinet will resume talks about an appeal tomorrow, as members of his alliance seek more details on the case. Kenny is propped up by a number of independent lawmakers from the left and right.

Junior Minister

One of those lawmakers, John Halligan, said parliament should be recalled to discuss an appeal of the decision. Now a junior minister in government, he said that while Apple should have paid more tax, it’s arrangements weren’t illegal. Given the biggest parties in parliament support an appeal, a vote in the legislature would almost certainly back one.

“I don’t think it should destabilize the government,” Halligan said in an interview with RTE.

The EU courts have the power to cut or overturn repayment orders if they find fault with the commission’s methodology during the appeals process. But such challenges can take years to complete, meaning that the final sum Apple may have to pay won’t be known until then. The money clawed back can be held in escrow pending a ruling.

The case may take as much as five years before it is completely settled, Dublin law firm McCann FitzGerald said in a report.

“Based on recent experience, an initial appeal to the EU’s General Court is likely to take two to three years to be decided,” it said. “If this appeal is successful, the European Commission will almost certainly appeal to the Court of Justice of the European Union, which would likely take a further two years to make a final ruling on the matter.”

The EU’s focus on past taxes is “unbelievable,” Cook said, adding that it was “fair” to have a discussion about the company’s future tax liabilities.

Cook likened the company’s relationship with Ireland to a “37-year-old marriage.” The two have “gone through potholes, but we stuck together.”

Before it's here, it's on the Bloomberg Terminal. LEARN MORE