Technical / Global corporate tax system should be overhauled: Apple CEO Cook

DUBLIN - Everyone knows that the global corporate tax system needs to be overhauled, Apple (AAPL.O) Chief Executive Tim Cook said on Monday, backing changes to global rules that are currently under consideration.

The growth of internet giants such as Apple has pushed international tax rules to the limit, prompting the Organisation for Economic Cooperation and Development (OECD) to pursue global reforms over where multinational firms should be taxed.

The reforms being examined center around the booking of profits by multinational firms in low-tax countries such as Ireland where they have bases - and where Cook was speaking on Monday - rather than where most of their customers are.

“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 said.

“It’s very complex to know how to tax a multinational... We desperately want it to be fair,” the Apple CEO added after receiving an inaugural award from the Irish state agency responsible for attracting foreign companies recognizing the contribution of multinationals in the country.

Apple is one of Ireland’s largest multinational employers with 6,000 workers and both it 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 said.

The Apple chief executive also said that more regulation was needed in the area of privacy and must go further than the 2018 European General Data Protection Regulation (GDPR) privacy laws that handed regulators there significantly more powers.

“I think more regulation is needed in this area, it is probably strange for a business person to be talking about regulation but it has become apparent that companies will not self-police in this area,” he said.

“We were one of the first to endorse GDPR, we think it is overall extremely good, not only for Europe. We think it’s necessary but not sufficient. You have to go further and that further is required to get privacy back to where it should be.”