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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