Apple tax ruling not political, says EU competition commissioner

Vestager rejects Apple chief executive’s assertions ruling was based on ‘no fact or law’

European Competition Commissioner Margrethe Vestager rejects Apple's criticism that an EU order to the company to pay back taxes to Ireland is political, noting the calculations are based on facts and Apple's own data. Video: REUTERS

 

European Union competition commissioner Margrethe Vestager has rejected accusations by Apple chief executive Tim Cook that the European Commission’s finding on tax against Apple was motivated by political concerns.

Speaking in Brussels on Thursday, Ms Vestager defended the independence of the commission’s competition division.

“I know what we are obliged to do and that is to take decisions that are independent, based on the treaty, the facts of the case and can be checked by the European courts,” she said.

She said state-aid cases had been taking place since 1958.

“We have a court practice that says quite clearly that state aid can come in many forms. In this case [it’s] as a tax benefit . . . The only politics of that is that we’re here to make sure the treaty is upheld and this is in the treaty.”

Revenue rulings

In an interview with RTÉ radio, Apple chief executive Tim Cook said it was clear the ruling was “coming from a political place” and was based on “no fact or law”. He denied that Apple had benefited from illegal state aid from Ireland through two tax rulings negotiated between the company and the Revenue in 1991 and 2007.

Tuesday’s finding against Apple was by far the largest ruling by the commission’s competition arm on a state aid matter related to tax. The previous state aid record was €1.3 billion in 2014.

Asked about Mr Cook’s assertion that the commission’s accusation that the company paid 0.005 per cent tax in 2014 was false, Ms Vestager said the commission had used figures supplied by Apple in US Senate hearings in 2013. She noted that tax rulings were by their nature confidential up to this point, adding that the commission’s investigation could take place only once the figures became public.

Ms Vestager said the commission was within its rights to pursue the state aid case as the issue concerned Europe. “The Apple case is about profits made on sales in Europe, profits that are recorded in Ireland, so obviously it is a question of taxes being paid within EU jurisdictions . . . So it is quite obviously a European matter and a matter for EU state aid rules.”

US treasury secretary

Ms Vestager said she believed the EU and US were “on the same page” when it came to the principles of tax avoidance, and would meet US treasury secretary Jack Lew later this month in Washington.

“It is very important to continue the dialogue. A global tax coalition is forming in order to have more transparency, more fairness,” she said.

Ms Vestager added that it now fell to Apple and the Irish authorities to decide when the full 130-page decision on the Apple state aid case would be published, urging both to co-operate.

“The ball is basically in the hands of Apple and Ireland. We have to clear the decision from things that are confidential and I do hope, because I can sense that there is an interest . . . that both Apple and Ireland will be as open and as co-operative as possible in order for us to be able to publish the decision as fast as possible.”