The Government has finalised an agreement with Apple over the management of an escrow account into which its contested €13 billion tax bill will be paid. The ruling obliges Apple to pay back €13bn.
The European Commission ruled a year ago that a tax deal that Ireland gave Apple was illegal, and that it owed the country $14.5 billion in back taxes.
In fact, the European Commission had ordered the government of Ireland to collect the "back taxes" only after concluding that two Irish tax coding permitted by Apple, that is to pay less tax than other businesses.
What did Apple do exactly to warrant a payment as big as €13 billion?
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Irish Finance Minister Paschal Donohoe told reporters that the Government has "now reached an agreement with Apple in relation to the principles and operation of the escrow fund". According to the EU, the tax deal allowed Apple to pay nearly nothing in tax on its European profits between 2003 and 2014.
Ireland reportedly will begin collecting more than $15 billion in back taxes from Apple in a move that could mark the end of a long-running dispute with the European Union. The deal had allowed Apple to pay an effective corporate tax rate of one percent on its European profits in 2003, down to as low as 0.005 percent in certain years, according to Vestager.
The Irish Finance Ministry said: "These sums will be placed into an escrow fund with the proceeds being released only when there has been a final determination in the European Courts over the validity of the Commission's Decision". Whether or not the original ruling gets overturned remains to be seen.