Apple, Ireland strike deal on €13bn tax payment

About 500 people wait in front of the Apple Store to buy the new iPhone 4, in Zurich, Switzerland, early 30 July 2010 (reissued 10 January 2018). [EPA-EFE/ALESSANDRO DELLA BELLA]

Ireland’s government on Tuesday (24 April) said it was signing a deal with Apple for the US tech giant to pay €13 billion in back taxes as ordered by the European Commission.

The formal signature is expected later on Tuesday and the money will go into an escrow account, a type of third-party account used in transactions, the finance ministry said in a statement.

The money is expected to be paid into the account by the third quarter of this year pending an appeal against the EU ruling by Apple and the Irish government, the ministry said.

Finance Minister Paschal Donohoe said the government still “fundamentally disagrees” with the 2016 ruling which said Apple had benefited from illegal tax breaks offered by Ireland.

Donohoe said Ireland would, however, comply with its “binding legal obligations” as a European Union member state.

Apple has its European headquarters in Ireland.

Ireland set out arguments against EU in Apple tax ruling

Ireland set out its arguments on Monday (19 December) against a European Commission ruling that tech firm Apple should pay billions in back-taxes to Dublin, claiming the EU executive arm has interfered in state sovereignty.

“This is the largest recovery fund of its kind ever to be established,” Donohoe said, explaining delays in the process of establishing the account.

The European Commission has said that Apple had received favourable tax terms in Ireland that amounted to state aid.

The government claimed that Apple has paid the full amount due to the Irish state from 2004 to 2014 and denies it gave it “selective treatment”.

But the European Commission said Apple paid an effective corporate tax rate of just 0.005% on its European profits in 2014 – equivalent to just €50 for every million.

Brussels discloses full decision on Apple’s tax schemes

The European Commission released yesterday (19 December) its full decision on Apple’s tax arrangements in Ireland. The document reveals the details of the tech giant’s tax scheme for the first time in Europe.

Subscribe to our newsletters