Apple to Pay EUR 13 Billion in Back Taxes

What is behind Apple's overdue billions? Who will they be paid to? Who turned out to be an ally of the American electronics giant? Find out!

The American corporation Apple has decided to pay Ireland EUR 13 billion. The amount is linked to back taxes resulting from unlawful tax breaks granted to the company by the Irish authorities. According to the latest arrangements, the entire amount will be paid in instalments, landing in a special escrow account. However, the money will only be released after the European Court of Justice issues its ruling.

Calculations carried out by the European Commission show that Apple has not paid taxes since 2016. This executive body also determined that the American giant benefited in Ireland from tax breaks prohibited under EU rules. The Commission demanded that the Irish government recover from Apple EUR 13 billion that was saved illegally.

In defence of Apple

Interestingly, an Irish ally emerged in the dispute between the EU and Apple. The country's authorities came to the corporation's defence. They claim that under EU law they may grant tax breaks to entities that have a significant impact on the development of Ireland's economy. However, this argument was not accepted by the EC, and as a result, in autumn 2017 a complaint was filed against Ireland with the European Court of Justice.

The first case of its kind in EU history

On 24 April this year, Ireland's finance minister, Paschal Donohoe, announced during a press conference that Apple had decided to pay EUR 13 billion in back taxes. Interestingly, in a comment on the agreement concluded with the company, he stressed that this is the first case in the history of the European Union of repaying overdue tax liabilities of such a magnitude.

The head of Ireland's finance ministry announced that as early as May 2018 he would begin paying further instalments of the funds into a special escrow account. The money will remain there until the European Court of Justice issues a ruling on the appeal filed by Apple.

However, experts speculate that the court will most likely reject Apple's appeal, and the deposited funds will be released and handed over to the Irish tax authorities.