Bloomberg TV Interviews David Rosenbloom: Apple Challenges EU Tax Bill: Do They Have a Case?

Bloomberg Technology spoke with Caplin & Drysdale’s international tax lawyer and NYU International Tax Program Director David Rosenbloom, as well as Techonomy Media CEO David Kirkpatrick, Sofi CEO Mike Cagney, and Atul Rustgi, partner at Accolade Partners concerning Apple’s challenge of the EU tax bill.  

Bloomberg: Apple claims they were selectively targeted by the EU here.  Do you think they have a case?

Rosenbloom: Well yes they have something of a case.  I think that it’s true that the state aid investigations are focused to some extent, not entirely, but to some extent on U.S. companies.  On the other hand, it’s probably also true that U.S. companies have led the world in aggressive tax planning.  So I don’t find it particularly surprising that the Commission would begin by focusing on U.S. companies.

Bloomberg: There is much already under discussion from a global perspective.  The OECD had been lining up trying to see how they can perhaps tackle some of the different rules and regulations worldwide and start to get all countries singing from the same hymn sheet. Is that the only way that we can perhaps progress forward is if there is some sort of agreement worldwide between the tax practices?

Rosenbloom: I think what’s missing in the debate, in the Apple debate  – and it’s partly in answer to your question, a large answer to your question –  is the facts.  The OECD necessarily reaches consensus at a pretty high level of generality.  The issues come up at a very factual level so that applying these general concepts to the particular facts at hand is a real challenge.  I don’t think it’s possible to reach international agreement on the kinds of issues we’re talking about. 

I might add that notwithstanding the Commission’s decision which was released today on Apple, at least I saw it today, 130 pages, it’s pretty slim on what actually happened.  It’s got a great deal of history about the dispute, about the OECD, about state aid, it’s got a lot of legalese which makes for pretty tedious reading for most people, but I was looking at it to find out what actually happened here and boy you look in vain to find out how it was that one of these companies, ASI, booked pretty much just about half of Apple’s profits in the year 2015.  The Commission says Apple had about $54 billion in profits in 2015, and ASI – if I read it correctly –  booked somewhere south of $25 billion.

To view the interview in its entirety, please visit Bloomberg’s website.