technology

Apple Takes Next Step Toward Paying EU13 Billion Tax Demand

  • Ireland, Apple agree on structure of account to hold funds
  • Money will be repaid to Apple if appeal is successful

Apple Inc’s campus in Cork, Ireland, in 2016. 

Photographer: Patrick Bolger/Bloomberg

Apple Inc. will start transferring billions of euros to Ireland within months, after reaching a deal on an account to hold the cash while it fights a European tax case.

In a 2016 order that reverberated across the Atlantic, the European Commission, the EU’s executive arm, slapped Apple with a tax bill of as much as 13 billion euros (15.9 billion), saying Ireland had granted unfair deals that reduced the company’s effective corporate tax rate.

The money will start to flow into an escrow account by the end of June, with Ireland getting all the money by the end of October, Finance Minister Paschal Donohoe said in Dublin Tuesday.

While Apple and Ireland appeal the EU decision, regulators demanded that the government hold the money in escrow until the process is complete. The appeal may take as long as five years, and is likely to start in the fall, Donohoe said.

In August 2016, the EU ordered the government to collect the tax arrears within five months, and then decided to sue Ireland for not getting the money on time.

The delay may have been linked in part to Ireland’s wish to negotiate a deal to cover itself against any losses stemming from holding the money, as first reported by Bloomberg News. Donohoe said Tuesday the taxpayer wouldn’t be on the hook for any losses.

“This is the largest recovery fund of its kind ever to be established,” he said. “Due to the complexity of such, together with our duty to comply with EU procurement rules, it has taken some time to get to this point.”

— With assistance by Peter Flanagan

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