Open letter to Tim Cook / Lettre ouverte à Tim Cook

Dear Tim,

We understand that your position is not a comfortable one. After all, at Apple, you inherited from Irish tax arrangements you did not contribute to instigate, and you cannot be held responsible for Europe’s lack of tax harmonisation.

Yet, as a patriotic Europeans we cannot help being very disappointed by your reactions to the European Commission’s ruling against Ireland, regarding tax arrangements with your company. Indeed, your « political crap » quote regarding the Commission’s work, as well as your putting the jobs created in Cork into the balance as if the value these people gave your company can be ruled out if you have to pay tax, are disheartening. Reacting this way, you only manage to give a bitter aftertaste to dealings that - if upheld by the EU Tribunals - are very serious indeed.

This is law, not politics, we are talking about. And in this instance, tax law enabling civilized countries to have schools, transportation, health services and welfare systems. Law that makes the world a better place by making sure that the rich contribute to the wellbeing of the poor and the healthy to the wellbeing of the sick. Serious law.

Let’s talk about the Irish tax system and its relationship with EU law. Firstly, in European law, the European Treaties are superior to Irish, and all member States, law. This is a simple hierarchy of norms issue. Secondly, in the EU Treaty, article 107 states that « any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market. » Yet, sadly, you chose to dismiss the EU Commission - and - and possibly the European Courts - as reckless jesters, implying they illegally melded with Irish law.

The EU Commission did nothing but the work they are paid to do. Under EU law, as we have no tax harmonization, it is true that Member States can choose freely which tax rate they apply to corporations. But once this rate is set, they have to apply it to all, lest there be inequalities under article 107 of the Treaty. This is because such inequalities would result in a situation where some have to pay for the others to enable the EU countries to function, whilst giving an unfair advantage to those paying less. The Commission gave plenty of elements in its decision that Ireland did not apply its legal tax rate to Apple for many, many years. Far from it. And Apple knew it very well. In fact, with regards to the huge case law applying article 107, the Irish measures regarding Apple are textbook State aid with no legal complexity.

That being said, you have a right to appeal the Commission’s decision and give your legal opinion about it. Let’s add that this is your right only because EU law gives it to you. We could have chosen, in the Treaties, to give the right of appeal only to the Member State mentioned in the decision. But Europe being democratic and civilized, it gives YOU, - as an interested party - the right to appeal too.

As much as we believe your appeal is totally justified and we hope it will help make EU law even more accurate, the rest of you reasoning is both weak, and insulting.

We might add that the European Commission’s decision is probably much less political in nature than, for example, the FTC’s decision not to sue Google for abuse of a dominant position in the United States. Or than Jack Lew defending Apple, Google and others by threatening Europe of retaliation measures should they apply European law.

In conclusion, you know it better than we do : Uncle Sam does not fool around when it comes to taxes. In the United States, Apple has to pay a federal corporate tax on its profits earned in the country, and would never dream of not paying it. May we remind you, also, that the first federal corporate tax in the US was enacted in 1894, then deemed unconstitutional, then reenacted, in the form of an excise duty, in 1909. We still have no corporate tax in the EU, because we are young and building such a system takes time, just like it took time in the US. Of course things would have been more straightforward for Apple, for Ireland, and for the EU, if we had had such an harmonized system already. Let’s hope the present situation helps everyone understand this is the next step we Europeans need to reach for.

With our kind regards,

La rédaction d'ElectronLibre

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Rédigé par Isabelle Szczepanski

Plateformes, culture, droit d'auteur, taxation du numérique

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