Apple’s Tim Cook Calls For Overhaul Of Global Tax System

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Corporation tax needs global overhaul Cook says, as President Macron and President Trump declare truce in digital tax spat

The boss of Apple has once again waded into the debate about digital tax, during CEO Tim Cook’s visit to Ireland.

Cook on Monday said that everyone knows that the global corporate tax system needs to be overhauled, Reuters reported.

This is not the first intervention on tax by Tim Cook. Back in 2013 Cook told the US Senate Permanent Subcommittee on Investigations that tech firms abided by the tax laws as they are currently written.


Global tax

At the moment, the Organisation for Economic Cooperation and Development (OECD) is developing global reforms over where multinational firms should be taxed.

Tech companies have long been criticised by governments and regulators for their tax practices that sees them reducing their tax bills by booking profits in low-tax countries (such as Ireland) regardless of the location of the end customer.

Efforts to develop wide ranging tax reforms have floundered so far.

Plans for an EU-wide digital tax failed upon the objections of certain countries, forcing member states including most notably France to push ahead with their own national levies.

Into this debate has stepped Apple’s Tim Cook whilst he was in Ireland.

On the one hand Ireland is one of those countries accused of allowing tech firm to book profits in its low-tax regime, but on the other hand Apple is a big investor in Ireland with over 6,000 staff in the country.

“I think logically everybody knows it needs to be rehauled, I would certainly be the last person to say that the current system or the past system was the perfect system. I’m hopeful and optimistic that they (the OECD) will find something,” Cook was quoted as saying by Reuters.

“It’s very complex to know how to tax a multinational… We desperately want it to be fair,” the Cook added.

It should be noted that Apple and the Irish government have gone to court to fight a European Union order that Apple must pay 13 billion euros ($14.41 billion) in back taxes to Dublin.

The appeal to the EU’s second-highest court began in September and could run for years.

Cook said Apple’s belief that “law should not retrofitted” was at the heart of the case and that the company had great faith in the justice system.

Apple’s commitment to Ireland, which became its first European operation in 1980, was “unshakable”, Cook added.

Trade war

Meanwhile President Donald Trump and President Macron of France seemed to have reached a truce over France’s decision to impose a digital tax on foreign (mostly US) tech firms at the start of 2019.

President Macron was quoted by Reuters as saying on Monday he had a “great discussion” with President Trump and said the two countries would work together to avoid a rise in tariffs.

Macron and Trump reportedly agreed to hold off on a potential tariffs war until the end of 2020, a French diplomatic source said, and continue negotiations at the Organization for Economic Cooperation and Development (OECD) on the digital tax during that period.

“They agreed to give a chance to negotiations until the end of the year,” the source told Reuters. “During that time period, there won’t be successive tariffs.”

The White House said on Monday both Trump and Macron agreed it is important to complete successful negotiations on the digital services tax.

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