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"Global tax reform is needed"

enero 21, 2020

Tim Cook is in Ireland to receive an award in recognition of Apple?s 40 years of investment in the country. Apple?s CEO has taken the opportunity to talk about global taxes.

Tim Cook Ireland

After receiving the award from Irish Prime Minister Leo Varadkar, Tim Cook said that to date everyone knows how the current global tax system for multinationals needs several reforms:

I think what we all know is that the most logical thing is to reprogram the tax system. I would certainly be the last person to say that the current or past system was the perfect system. I am confident and optimistic that the OECD will find a solution.

Ireland has been a second home for Apple for the past 40 years and this honor is even more special for us as it recognizes the contributions of our incredible team who work tirelessly to serve our customers across the country and around the world. We deeply believe that our most important work is before us and I believe in the Irish people for their commitment, openness, innovation and cooperation which will make possible the next generation of ideas that will change the world.

More than 130 countries agree on the need for a coordinated approach to prevent corporate tax evasion. The Organization for Economic Co-operation and Development (OECD) is currently working on a plan to ensure that businesses pay taxes in each of the countries in which they operate:

In the future, Apple and other tech gloves will have to pay taxes in all countries where they sell products and services. For example, Apple will no longer be able to channel profits from all European Apple Stores through Ireland to avoid taxes in the countries where products are actually sold. Ireland is likely to lose a lot of tax revenue as a result of these changes, but most countries will benefit, as businesses will pay taxes in each country based on the profits from their local sales.

To ensure a level playing field, all signatories will apply a standard tax formula to the agreement, based on a percentage of local sales profits.

If companies use creative accounting to declare that no profit has been made in one country, for example by paying large amounts of royalties to a division based in another country, a second OECD measure will tax local revenues, although probably a very low rate.Apple?s CEO didn?t specifically discuss how any action might be taken by the OECD.

During his trip to Ireland, Tim Cook had the opportunity to meet several artists (such as the musician Hozier), developers (the creators of War Ducks) and employees of the Apple Store.