|By Aaron Sims | 3 years ago|
The Irish government is setting up an escrow fund to facilitate the collection of an estimated 13 billion Euros–$15.2 billion—in back taxes from Apple Inc. The arrangement is the product of months of intensive negotiations between Ireland, Apple, and the European Union and resolves European Union complaints from a year ago that the Irish government had been giving the iPhone giant an unacceptably lenient break on corporate taxes.
A custodian appointed jointly by Apple and the government will oversee the new account, which Apple will deposit funds into until it has paid the tax debt in full, said the Irish finance ministry in a statement. One or more investment managers will also help manage the funds.
The case dates back to August 2016, when the EU’s Competition Commission ruled that Ireland had been giving Apple a special corporate tax break and that the deal broke state-aid rules. The commission ordered Apple’s tax dues to be recalculated in accordance with EU regulations, resulting in a 13 billion-Euro back-tax obligation that Apple was on the hook to pay.
Ireland was supposed to have collected the balance from Apply by January, but negotiations and court appeals dragged out the process past this deadline. The Irish finance ministry and Apple both said that they are working to resolve the situation.
“The European Commission’s case against Ireland has never been about how much Apple pays in taxes, it’s about which government gets the money,” said Apple spokesman Josh Rosenstock. “The United States government, the Irish government and Apple all agree we’ve paid our taxes according the law. Since virtually all of our research and development takes place in the United States, according to the law, we pay the majority of our taxes in the U.S.”