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Apple hands €14.3bn in back taxes to reluctant Ireland

Funds to be held in escrow as govt appeals EU 'state aid' ruling

Apple has paid the Irish government €14.3bn in back taxes after the European Commission ruled that arrangements between the pair had broken the state aid rules.

Competition commissioner Margrethe Vestager ordered the Cupertino firm to pay up the €13.1bn plus interest two years ago after an investigation ruled the emerald isle had granted illegal tax benefits to the US giant.

This "enabled it to pay substantially less tax than other businesses over many years," Vestager said at the time, with the firm paying "an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014".

The Irish government has continued to dispute the ruling, a point that finance minister Paschal Donohoe emphasised in a statement issued yesterday.

"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," he said.

Apple agreed to pay the money, which includes some €1.2bn in interest, last December.

The €14.3bn was paid during the second and third quarters of 2018 – during which time Apple generated $25.34bn (€20.79bn) profits (Apple reported net income of $13.82bn in the three months to March, and $11.5bn in the three months to June).

The alleged state aid cash will be held in an escrow fund until the appeal process has been completed, which could take years.

Donohoe noted it was one of the largest such funds to be established, with a nod to the time that has passed since the decision was handed down.

"It has taken time to establish the infrastructure and legal framework around the Escrow Fund but this was essential to protect the interests of all parties to the agreement." ®

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