Ireland starts to collect Apple’s €13bn back tax

Ireland’s finance ministry has announced that it is to start collecting €13bn (£11.4bn) in back taxes from US tech giant Apple, which it had previously held off from doing following a hotly disputed European Commission ruling relating to the use of illegal state aid

The deadline for Ireland to make arrangements to clawback the money expired in January this year, and in October, the Commission referred Ireland to the EU Court of Justice for its failure to do so.

After the initial refusal to collect the money, Ireland has now said it is being paid into a blocked separate account pending the outcome of legal challenges to the decision. 

The Irish Finance Ministry said in a statement on 5 December that 'these sums will be placed into an escrow fund with the proceeds being released only when there has been a final determination in the European Courts over the validity of the Commission's Decision.’

Ireland indicated that Apple will begin to transmit money into the account across the first quarter of next year.

An Apple spokesperson said the company was confident the court would overturn the Commission's decision: ‘The Commission's case against Ireland has never been about how much Apple pays in taxes, it's about which government gets the money.

‘The US government and the Irish government both agree we've paid our taxes according to the law.’

A two-year Commission investigation concluded in 2016 that Ireland granted illegal tax benefits to Apple, via two rulings it provided which meant the US company paid an effective corporate tax rate of 1% on its European profits in 2003, dropping to 0.005% in 2014.

The Commission demanded that Apple repay the retrospective tax bill together with interest earned, but this decision was strongly opposed by the Irish government and the multinational, both of whom have launched legal appeals.

Ireland was concerned that accepting the money risked undermining its low corporate tax regime and the certainty of tax rulings, while Apple maintained it had paid all the sums due.

At the time Apple CEO Tim Cook said: ‘We now find ourselves in the unusual position of being ordered to retroactively pay additional taxes to a government that says we don’t owe them any more than we’ve already paid.’

Report by Pat Sweet

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