February 23, 2018

Main » Apple strikes interim deal on escrow fund for $15B Irish tax claim

Apple strikes interim deal on escrow fund for $15B Irish tax claim

06 December 2017

American tech firm Apple has confirmed that it's to comply with a ruling from the European Commission and pay Ireland billions owed in taxes.

As The Wall Street Journal reports, Irish Finance Minister, Paschal Donohoe, said today that he is expecting the money from Apple to begin going into the account in the first quarter of 2018. The Commission ordered Ireland to collect back taxes for the years 2003-2014, which it estimated to be as much 13 billion euros plus interest.

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Apple has made a string of investments in the country over the last few years, and the Irish Government fears that the tax bill will affect jobs.

Ireland has allowed Apple to pay lower tax rates than other EU nations since the early 1990s, but the European Commission ruled in August 2016 that Ireland's practice was illegal and that Apple must pay the rest of the money it should have been taxed.

Apple agreed to place the money into escrow, but as $15B escrow funds aren't exactly available as off-the-shelf financial products, and the iPhone maker believes it will get its money back when a court finally rules, it wanted to negotiate the terms of the escrow fund - presumably to ensure that it is earning a decent return.

The European Commission ordered Apple to pay the sum a year ago. This is necessary to defend the integrity of our tax system; to provide tax certainty to business; and to challenge the encroachment of European Union state aid rules into the sovereign Member State competence of taxation.

However, Apple added that it remains confident that the court will overturn the commission's decision after reviewing and reading the evidence they have presented in their defense.

Apple strikes interim deal on escrow fund for $15B Irish tax claim