Tim Cook: Apple may bring billions back to U.S. next year

In what seems to be a huge turnaround, Apple CEO Tim Cook says the company plans to bring back billions of dollars in profit to the U.S. next year.

Cook’s statement, made during an interview with RTE radio Thursday, contradicts his previous public statements on the issue: He has said for years that U.S. corporate taxes are too high, and that the Silicon Valley company wouldn’t be repatriating profit until its home country changed its tax code.

“Right now I would forecast that we repatriate next year,” Cook said, saying that the company has “provisioned several billion” for that purpose.

The interview with Irish radio was about this week’s European Commission judgment, which found that Ireland’s tax arrangements with Apple were illegal. The commission found that Apple had paid as little as 0.005 percent to 1 percent in taxes there, and ordered Ireland to collect the equivalent of $14.5 billion in back taxes. Cook said Apple will appeal the decision, which he called “maddening.”

Ireland — whose low corporate tax rates are a lure to other multinationals such as Google and Facebook — may also appeal the commission’s decision.

The decision has rankled the United States, which wants its share of the tax pie. After all, U.S. corporations were holding more than $2 trillion in profit overseas in 2014, according to a 2015 study by Citizens for Tax Justice and the U.S. Public Interest Research Group Education Fund. Apple had the biggest overseas stash then at $181 billion; the company said in July that its offshore pile had reached about $215 billion.

White House press secretary Josh Earnest said this week that Europe’s Apple judgment is effectively “a transfer of revenue from U.S. taxpayers to the EU.”

The U.S. has a corporate tax rate of 35 percent, and state and local governments also want their share. In December, Cook said during a “60 Minutes” appearance that bringing profit back to the U.S. “would cost me 40 percent.” He told interviewer Charlie Rose: “This is a tax code, Charlie, that was made for the industrial age, not the digital age. It’s backwards. It’s awful for America.”

Cook did not indicate during this week’s radio interview what had changed — a proposal by President Obama in 2015 to change the tax code and lower corporate rates was rejected by Republicans — and how much Apple plans to repatriate.

Cook also said that in 2014, Apple paid $400 million in taxes in Ireland and $400 million to the United States.

Apple has not responded to SiliconBeat’s request for comment.

 

Photo: Apple CEO Tim Cook speaks at a product launch event March 21, 2016, at Apple headquarters in Cupertino, Calif. (Karl Mondon/Bay Area News Group)

 

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  • FresnoUser

    The US should change the tax code. If your business headquarters or manufacturing is done in America, all your sales (anywhere in the world) are taxable in America at the going rate. No loop-holes, no exemptions, no exceptions.

    • another_programmer

      Why? So that the politicians can squander that money and/or use it for the BIG FAT pensions and salaries doled out to Government employees? OR for the freebies given to illegals?

      • Mark

        That’s an argument for systemic tax and government reform, but not an argument against preventing an individual company from abusing the tax system.

        Apple has been able to pay minimal taxes. While someone who owns, say, a hotel or a nail salon, has to pay full rates because opportunities for income shifting to Ireland are next to impossible and certainly infeasible.

      • mikeswitz

        Russian troll?

        • Mike

          Lot of them targeting European discussions trying to make any exceptional destabilisation seem like the norm. Sad that we now have to be so guarded around the comments section

    • Jari Sundell

      Pretty sure the whole thing with the US claiming rights to tax multi-nationals’ profits overseas is what got us in this mess in the first place.

      So no, just because a company does part of its development in the US does not mean the US gets to tax every sale internationally. Sell locally, tax locally. Spend on R&D internationally, deduct reasonably.

  • Armand

    Let me translate for you. Tim Cook to US Gov’t: Help us out and we’ll give you a kickback of whatever we end up not paying to the EU.

  • Ekul1021

    How about bring the Apple’s job back to US then instead? Don’t have to deal with China for sure.

  • FresnoUser

    The IRS is standing by, ready to take those billions as a down payment on Apple’s tax bill.

 
 
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