Apple’s business structure and tax practices in Europe were around long before Tim Cook became CEO. He didn’t invent those things, but he’s vigorously defending them. His arguments in media interviews sound compelling, but they present only one side of a hot-button issue that’s easily relatable to the overarching wealth distribution and fair taxation themes of election cycles in both the U.S. and Europe this year.

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The European Union, after a lengthy investigation, ruled Tuesday that Apple’s use of Irish subsidiary companies to avoid paying taxes amounts to the tech giant receiving “illegal state aid” from Ireland. As a result, Apple may be required to pay around $14.5 billion in back taxes dating back to 2004. Cook had a carefully worded—and, at times, sharply worded—open letter ready to publish when the judgment was officially announced. He opens the letter by describing Apple’s history in Ireland dating back to 1980, when Steve Jobs set up the company’s first factory there. Apple employed 60 people in Cork county then, and employs more than 6,000 there now, Cook says. He points out that Apple’s Irish operations have helped create and sustain millions of app development, manufacturing, supplier, and small business jobs across Europe. To get the other side of the argument I went to Matt Gardner, the director of the Institute on Taxation and Economic Policy (the research umbrella for Citizens for Tax Justice). The CTJ is nonpartisan and nonprofit, and it’s funded by some of the same foundations that fund NPR. As it turns out, Gardner energetically disagrees with many of the statements in Cook’s letter. Here are his responses to Cook’s main points. Cook: As our business has grown over the years, we have become the largest taxpayer in Ireland, the largest taxpayer in the United States, and the largest taxpayer in the world. Over the years, we received guidance from Irish tax authorities on how to comply correctly with Irish tax law—the same kind of guidance available to any company doing business there. Gardner: We weren’t in the room, so we can’t know whether or not they [Apple] ever asked for a special deal. But it’s hard to deny that they received one, in the sense that they’re using an arcane legal structure that is simply not available to the many smaller businesses Apple competes with. When they say “the same kind of guidance” is “available to any company,” they mean that in theory any company could choose to employ their highly paid accounting and legal teams to construct the same artificial, tax-motivated network of subsidiaries that Apple did. But this is ludicrous, since most small businesses simply don’t have the resources to construct an elaborate tax-dodging scheme of this kind. It’s like saying that anyone could go start a company to send a rocket to Mars, even though only Elon Musk actually did it. Apple created a complicated web of subsidiaries to avoid taxes, and the Irish government allowed it. Both the company and the country were complicit in this agreement. The idea that Ireland gave Apple guidance on “how to comply correctly with Irish tax law” makes both parties sound less guilty than they are. A better characterization would be that Apple cooked up a tax-dodging scheme, and Ireland allowed it.

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Cook: The European Commission has launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws, and upend the international tax system in the process. The opinion issued on August 30 alleges that Ireland gave Apple a special deal on our taxes. This claim has no basis in fact or in law. We never asked for, nor did we receive, any special deals. Gardner: The interesting question is the sequence of events. Like many of the most sophisticated tax-avoiding companies in the world, they pushed the limits of what the law would allow. They set up a set of subsidiaries whose purpose was almost entirely to avoid paying taxes. And they subsequently received a ruling that the setup was within Irish law. It’s clear as day—and this was one of the findings of the 2013 Senate subcommittee—that there was no sensible business reason to set up those subsidiaries except to avoid paying taxes. It makes no difference that Ireland cheerfully agreed to it. It’s still a tax dodge, just a state-sanctioned tax dodge. Ireland and other tax havens have built their economic development strategies on encouraging companies to shelter their profits there, and then to take their cut. Ireland has made a choice to structure their tax laws in a way that facilitates tax avoidance and that attracts tax-avoiding companies. Cook: We now find ourselves in the unusual position of being ordered to retroactively pay additional taxes to a government that says we don’t owe them any more than we’ve already paid. The Commission’s move is unprecedented and it has serious, wide-reaching implications. It is effectively proposing to replace Irish tax laws with a view of what the Commission thinks the law should have been. Gardner: All the EU is saying is that Ireland’s tax rate is 12.5% and wouldn’t it be nice if Apple actually paid that tax rate. It’s certainly not coming up with a new tax regime that’s never been seen before. In order to have a level playing field among companies doing business in the European Union, all companies doing business in Ireland should be subject the same tax rate.

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Cook: This would strike a devastating blow to the sovereignty of EU member states over their own tax matters, and to the principle of certainty of law in Europe. Ireland has said they plan to appeal the Commission’s ruling and Apple will do the same. We are confident that the Commission’s order will be reversed. At its root, the Commission’s case is not about how much Apple pays in taxes. It is about which government collects the money. Gardner: That’s incredible for a couple of reasons. The first is that the commission’s case is clearly about how little the company pays in taxes. The whole point is that they pay a phenomenally low rate tax rate—0.005 percent in 2015—on a very substantial amount of profits. This was the big revelation from the 2013 Senate subcommittee hearing: Apple constructed a subsidiary that was a tax resident of nowhere that would never have to pay any taxes. This is at the heart of what everyone is correctly saying Apple did wrong. It’s notable that there’s no point in this [Cook’s] very long letter where they discuss the question of tax rates. All they say is how many dollars they pay, abstracting away from their tax rate, and from the huge amounts that they avoid paying. They say they pay more taxes than any other company. This is certainly plausible, because few if any of the Fortune 500 can match their profits right now, but that doesn’t mean they’re paying anything resembling their fair share. The evidence is clear as day that they are paying one of the lowest effective tax rates in recorded history in Ireland right now. So the assertion that this isn’t about how much they’re paying is laughable. Cook: Taxes for multinational companies are complex, yet a fundamental principle is recognized around the world: A company’s profits should be taxed in the country where the value is created. Apple, Ireland, and the United States all agree on this principle. In Apple’s case, nearly all of our research and development takes place in California, so the vast majority of our profits are taxed in the United States. The incredible complexity and creativity in the Apple tax-avoidance scheme is almost admirable. But to say that they are interested in simplicity and clarity is laughable. Gardner: It sounds like what they’re saying is that these ought to be thought of as U.S. profits, which makes it hard to understand why they have been so eager to report these profits in Ireland up until now. As long as Apple can pretend their profits are being earned in Ireland they won’t have to pay a dime in taxes on them.

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It doesn’t appear to be even remotely truthful based on the numbers they publish in their annual reports. Each year they report that the majority of their profits are earned outside the U.S., with roughly a third (on average, over the past five years) coming from the U.S. When you look at the 10K, the annual report for 2015, you see the company reports earnings of $72 billion worldwide, and just one third of those profits are attributed to the U.S. And yet Cook’s statement says that the vast majority of their income is taxed in the U.S. We think that is a very low estimate. It certainly appears that the company is shifting profits out of the U.S. and into tax havens overseas. So one of these things must not be true: Either the numbers presented to shareholders in their annual report are false, or Tim Cook’s new statement that the majority of its profits are taxed in the U.S is false. They both can’t be true. Cook: European companies doing business in the U.S. are taxed according to the same principle. But the Commission is now calling to retroactively change those rules. Beyond the obvious targeting of Apple, the most profound and harmful effect of this ruling will be on investment and job creation in Europe. Using the Commission’s theory, every company in Ireland and across Europe is suddenly at risk of being subjected to taxes under laws that never existed. Apple has long supported international tax reform with the objectives of simplicity and clarity. Gardner: That bit made me laugh out loud. When the Senate’s permanent subcommittee was describing the elaborate tax-avoidance techniques used by Apple, they had to use flowcharts to explain it. The incredible complexity and creativity in the Apple tax-avoidance scheme is almost admirable. But to say that they are interested in simplicity and clarity is laughable. * * *

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In the public policy arena we have seen two very different Tim Cooks this year. One stood up the the FBI and insisted on protecting the absolute sanctity of secure and private user data. He appeared as the frontman for a virtuous Apple. The other Cook is the person out defending Apple’s version of corporate tax responsibility. That Cook is less admirable. Instead of defaulting to what’s become accepted behavior among the Fortune 500 to give more to shareholders and less to tax collectors, Apple should be actively working with governments to eliminate havens and loopholes and move toward fair and equitable tax policy. It should be in Washington negotiating the terms of the repatriation of its foreign profit stores back to the U.S. It should be setting an example for other multi-nationals by doing the right thing. That seems more in keeping with Apple’s culture, and more like who we believe Tim Cook to be. (You can read Cook’s letter, “A Message to the Apple Community in Europe,” in its entirety here. You can read the full judgment announcement by the European Union here.)