Apple to Begin Paying Irish Government $16 Billion in Back Taxes

Apple to Begin Paying Irish Government $16 Billion in Back Taxes

Apple was hit by the European Commission with a $16 billion bill for back taxes in 2016.

Why does Apple have to pay?

Technology giant Apple signed a legal agreement with the Irish government today that will allow the recovery of tax breaks deemed illegal by the end of the year.

Announcing the signing of a legal agreement between Apple and the Irish Government yesterday, Minister for Finance Paschal Donohoe TD said that he expects a first payment to be made next month, following which all payments are expected to be received by the end of September.

The news comes nearly two years after an investigation by the European Commissioner for Competition, Margrethe Vestager, led to a ruling that forced Apple to pay €13bn in back taxes to Ireland.

Back in 2017, Ireland faced the prospect of being fined by the European Union for non-compliance with the governing body's ruling.




Now Ireland will collect the penalty, it said on Tuesday, although there's still a chance Apple could get the money back. If Apple wins the case, Mr Donohoe said, there is an agreement on how loses or gains are managed.

In the meantime, the money will be held by an escrow account, Donohoe said.

However, he added that "the [Irish] Government fundamentally disagrees with the ruling of the Commission" in 2016 that ordered the country to collect around €13 billion plus interest from Apple.

Apple's general counsel and leading corporate attorney, Bruce Sewell, before the company's initial appeal was even submitted, claimed that Apple had characterized the EU's judgment as a "misunderstanding" about how large corporations like it operate, saying the move was meant to "generate lots of headlines". 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.

Apple is set to publish their Q1 results next week.

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