Ireland and Apple reach €13bn tax agreement

STEPHANIE LECOCQ

Danish EU Commissioner for Competition Margrethe Vestager speaks at a news conference on a case of illegal tax benefits for US company Apple at the European Commission, in Brussels, Belgium, 30 August 2016. Ireland gave illegal tax benefits to Apple worth up to 13 billion euros, Vestager said explaining the results of European Commission investigations examining whether decisions by tax authorities in Ireland, with regard to the corporate income tax to be paid by Apple comply with the EU rules on state aid. The Commission has been investigating under EU state aid rules certain tax practices in several member states following media reports alleging that some companies have received significant tax reductions by way of 'tax rulings' issued by national tax authorities.

Ireland and Apple reach €13bn tax agreement


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Apple and the Republic of Ireland have concluded a deal that will see the US manufacturer pay €13bn within weeks.

The agreement comes following an August 2016 ruling by EU competition authorities that sees Ireland’s favourable tax arrangements for the US technology behemoth as illegal state aid. Negotiations took place for little under 19 months after the European Commission made clear no company could be enjoying a taxation regime that is not available to other firms.

According to the Irish finance minister, Paschal Donohoe, payments will be made in instalments starting in the second quarter of 2018. The whole amount due will be paid by September.

The Irish government will not be enjoying a spending windfall. The deal between Apple and Dublin is that the money will be placed in an escrow account pending the company’s appeal at the European Court of Justice. According to Mr Donohoe, this is the largest recovery fund of its kind “ever to be established.”

European competition commission Margrethe Vestager hailed the agreement as “a significant day,” although Brussels had previously expressed frustration with the delay of the recovery.

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