The technology company has come in for some intense scrutiny of
its tax affairs in various parts of the world over the past few
years. The company's chief executive officer, Tim Cook, earned
himself a place on the Global Tax 50 2013 for advancing the US
tax reform debate by staunchly defending the legitimacy of
Apple's tax practices in front of the US Senate Permanent
Subcommittee on Investigations.
|Apple is a new
entry this year, CEO Tim Cook was also in the Global Tax
During that May 2013 hearing, Cook declared that Apple pays
"all the taxes we owe, every single dollar" and added that the
company not only complies with the law but also with the spirit
of the law. His defence was so convincing that some senators
even pitched in to throw their support behind Apple.
"I am offended by the tone and tenor of this hearing," said
Senator Rand Paul. "I am offended by a $4 trillion government
bullying, berating and badgering one of America's greatest
"If anyone should be on trial here it should be Congress
[for creating such a complex tax code]," added the
But the "bullying, berating and badgering" did not stop
In June of this year, the European Commission opened formal
state aid investigations into tax arrangements agreed with
certain multinational companies by certain EU member states.
The tax deals being looked at, of course, included rulings
agreed between Ireland and Apple in 1991 and 2007.
The EC has released a preliminary view which states that
"the tax rulings of 1990 (effectively agreed in 1991) and of
2007 in favour of the Apple Group constitute state aid". This
is an opening decision and does not constitute a formal
decision that state aid rules have been breached.
A key aspect of the investigation into the Irish tax deals
is the length of the advance agreements made with Apple. The
1991 agreement lasted 16 years, which the EU says is much
longer than the five year agreement typically entered into by
A formal decision could take some time. However, Margrethe
Vestager, the new European commissioner for competition and
antitrust, and Global Tax 50 2014 member, has promised not to
tolerate state-subsidised tax avoidance. She says she will
"send a signal" by quickly resolving the investigations into
national deals struck with Apple, Fiat Finance & Trade,
Starbucks and Amazon, describing this as a "high priority". The
involvement of Apple will ensure that, whatever outcome is
reached, headlines will be made, and multinationals, funds and
other taxpayers will be watching keenly to gauge whether they
are likely to receive similar scrutiny in 2015 and beyond.
The fact Apple is such a globally recognised brand counts
against it in the context of these investigations. Any
political win on the tax fairness front is easier to peddle if
the company is highly visible in the public eye. This helps to
explain why the company's operations in Australia are being
investigated on top of the scrutiny being applied in Europe and
the US. All of this means 2015 is certain to be another busy
year for Apple as it seeks to detach its brand from the tax
avoidance label that authorities around the world are trying to
pin on it.