Tim Cook, Apple chief executive, last month made a tax pledge that caused a frisson among analysts. No, this was not about Irish or European tax; instead, speaking on American television, Mr Cook promised that the technology group would repatriate some of the $200bn of cash that it stores overseas — if there was a “reasonable” US tax rate.
Initially this seemed like mere political posturing. After all, American companies such as Apple have complained for years that the US tax regime deters repatriation, since it can impose taxes of 35 per cent. Hence the eye-popping fact that $1.7 trillion of corporate cash is stored overseas, according to Moodys.But now Mr Cook’s pledge has taken on new life. Margrethe Vestager, European UnionU competition chief, last week accused Apple of underpaying €13bn of tax in Ireland. Mr Cook dismissed the ruling as “total political crap”. But in an attempt to rebuff Brussels, Cookhe has now declared that he expects “repatriation [will] occur next year”; indeed, Apple has apparently set aside “several billion dollars” to pay the American tax, or so the canny Mr Cook has declared.
Investors and US political pundits should take note. Mr Cook’s comment will certainly not placate Ms Vestager, nor will it calm the controversy in Dublin. But it could intensifyaccelerate a bigger shift under way in Washington in relation to the corporate tax debate.