Yahoo Finance Ireland collects €14bn Apple tax bill
Ireland has collected €14.3bn (£12.7bn) in unpaid corporate taxes and associated interest payments from Apple (AAPL), following the 2016 European Union ruling that said that tax benefits provided to the technology giant amounted to illegal state aid.
Ireland’s finance minister, Paschal Donohoe, confirmed on Tuesday (18 September) that the country had recovered the full amount this month. The company, he said, had deposited the amount in an escrow account, pending a joint appeal by Apple and the country of the ruling, which is expected to be heard this autumn.
Donohoe said that the Irish 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.”
The European Commission concluded that the benefits provided to Apple were not available to other companies, and thus were illegal.
Donohoe noted that, because this is the largest state aid recovery of its kind, it had taken some time to establish the infrastructure and legal framework to collect the money. In October 2017, Ireland was referred to the European Court of Justice for failing to recover the money within the commission’s stated four-month deadline.
The €14bn collected represents more than a quarter of Ireland’s annual tax take. The country collected around €51bn (£45bn) in taxation revenue in 2017. Around 90% of Apple’s profits outside the United States run through its Irish subsidiaries.
Two Irish tax rulings, in 1991 and 2007, allowed Apple to allocate the majority of these profits to the ‘head offices’ of these subsidiaries. Though Apple employs thousands of employees at its European headquarters in Cork City, these so-called head offices had no employees and were not tax resident anywhere — something that allowed the company to pay extremely low rates of tax. The rulings, the EU said, allowed for an allocation of profits that did not reflect the company’s economic activity.
In 2011, for example, Apple’s effective tax rate was just 0.05%, meaning it paid just €500 in taxes for every million euro of its profits. Following a 2013 change to Irish law, companies are no longer allowed to be ‘stateless.’
