Apple's $15 billion in back taxes won't help Ireland during COVID-19

Apple’s $15 billion in back taxes won’t help Ireland during COVID-19


International governments plan to rethink tax rules for the ‘digital age’
The cash is right there -- but not for the taking.
Photo: Pixabay/Pexels CC

Ireland is not allowed to use the 14 billion euros ($15.1 billion) in disputed back taxes it collected from Apple to help boost its economy during the COVID-19 coronavirus crisis.

Yesterday, the leader of the opposition Sinn Féin party, Mary Lou McDonald, said the Irish government could “right this minute” reach into the escrow account where the funds are held and use them to help workers. However, Taoiseach politician Leo Varadkar says that simply isn’t the case.

“Mary Lou McDonald should know better, the Apple money is in an escrow account and that is where it is being held until the European Commission decides where that money is going to go,” Varadkar said. “The European courts will decide whether that money either belongs to Apple or comes to the Irish revenue commissioners and then has to be distributed out among the counties of Europe. It’s not ours to take and it’s now before the courts.”

Varadkar added that Mary Lou McDonald should inform herself of the facts “before coming out with that kind of rubbish.”

Ireland gathers Apple’s back taxes (but not for COVID-19)

The European Union, of which Ireland is a member, handed Apple its giant $15bn tax bill in August 2016. It claimed 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. Although Ireland did not want to claim the money (Apple is a major employer in Ireland), it eventually did after the EU threatened it with legal action.

Apple paid the last installment of its payment in September 2018. However, since then Apple and the EU have continued to butt heads over the case. The money is being held in an escrow account until the matter is solved. This is likely to take several years, though.

In the meantime, Ireland or the EU can’t spend the money any more than you’d be able to sell an item that you’re technically borrowing. It remains for the courts to finally decide whether or not Apple owes the cash in question. Apple argues that it pays every cent of tax that it is required to.