After dragging its feet over collecting its giant 13 billion euros ($15.5 billion) tax bill from Apple, Ireland’s Department of Finance has revealed that an agreement has been reached with Apple over when the sum will actually be paid.
The giant tax haul, which Apple was ordered to pay by the European Commission over a year ago, will be transferred to an escrow account, which will manage the funds until all of Apple’s appeals have been heard. But not until 2018!
John Hogan, assistant secretary at the Department of Finance, acknowledged that the process of collecting the funds had taken longer than expected.
Apple vs. the European Union
The European Union handed Apple its enormous tax bill in August 2016, claiming that the company took advantage of illegal state aid that allowed it to route profits through Ireland.
The investigation alleged that Apple paid the equivalent of as little as 0.005 percent on all European profits in 2014. Despite the payment being owed back in January, however, both Ireland and Apple have continued to argue against it.
This led to the European Commission suing Ireland in October of this year. European Commissioner Margrethe Vestager noted that, “We understand that recovery in certain cases maybe more complex than in others, and we are always ready to assist. But member states need to make sufficient progress to restore competition.”
This week, the chair of the committee overseeing the case told John Hogan of Ireland’s Department of Finance that clashing with the European Court of Justice may have damaged Ireland’s reputation. Hagan argued that the country has done, “everything possible” to resolve the situation.
In the meantime, Apple’s tax avoidance overseas has continued to be an issue — with the recent “Paradise Papers” release reigniting the subject. Apple has always argued that it pays every cent that it owes, and reminded critics that it is the world’s largest tax payer. (Which, as the world’s most valuable company, is to be expected!)