Apple makes last payment on $16.7 billion in Irish back taxes

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Even given Apple's $1 trillion valuation, $16.7 billion in back taxes is a big chunk of money Apple hopes it will get back.
Photo: Jim Merithew/Cult of Mac

Apple has now transferred all €14.3 billion it has been ordered to pay Ireland for back taxes. The cash will stay in an escrow fund while Ireland tries to convince the EU that Apple should get its money back.

This is part of an on-going saga with the EU accusing Ireland of being a tax haven, and Apple caught in the middle.

In 2016, the European Commissioner for Competition Margrethe Vestager ruled that a deal between Apple and Ireland was created solely for unfair tax avoidance. Apple was ordered to pay €13.1 billion in taxes plus €1.2 billion in interest. That works out to $16.7 billion.

Over the past several months, Apple has been making payments on this debt, and had now deposited the full amount.

Apple & Ireland vs. the EU

Although it would be recipient of this money, Ireland doesn’t want Apple to pay it. The country argues that the iPhone maker has already paid all it owes.

“While the Government fundamentally disagrees with the Commission’s analysis in the Apple State Aid decision and is seeking an annulment of that decision in the European Courts, as committed members of the European Union, we have always confirmed that we would recover the alleged State aid,” said the Irish Minister for Finance in a statement.

The €14.3 billion paid by Apple will stay in the escrow account while Ireland tries to get Commissioner Vestager’s decision reversed.

The emerald tax haven

It may sound unusual for a country to try to turn away tax money, but Ireland is doing so to keep its reputation as a tax haven within the EU. A reputation it publicly denies it deserves.

But quite a few companies have their European headquarters in Ireland because they enjoy special tax rates. As just one example, when Apple moved its headquarters to Cork, its tax rate was 1 percent. It was down to 0.0005 percent by 2014. Amazon, Dell, Microsoft, Google, Facebook and many more companies have similar deals.

It is the job of Margrethe Vestager and the European Competition Commissioner to prevent exactly what Ireland is doing. Consistent corporate tax rates across the EU ensure companies don’t put all their facilities in tax havens, as this harms the entire EU