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If Apple is forced to pay a big chunk of tax in the EU, why wouldn't they spin off their EU sales operations as a completely separate independent company? Apple US (or Apple Cayman Islands) could then sell iPhones to Apple EU and demand a wholesale price very close to the retail price. Apple EU would therefore make very little profit and pay very little EU tax.

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That's called transfer pricing and is essentially illegal in almost every jurisdiction. There are of course plenty of loopholes and ways around it and large companies such as Apple spend a fortune with the big 4 accounting firms to take advantage of every such loophole.

Would transfer pricing still be an issue if Apple EU was a completely separate company?

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