Apple has finished wiring billions of euros to pay back illegal tax benefits to the Irish government according to Reuters
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Apple has
finished wiring billions of euros to pay back illegal tax benefits to the Irish
government according to Reuters. Overall, Apple has paid $15.3 billion (€13.1
billion) for the original fine as well as $1.4 billion (€1.2 billion) in
interests.
In August
2016 the European Commission ruled that Apple benefited from illegal tax
benefits from 2003 to 2014. In particular, the company should have paid more
taxes in Ireland — a lot more. Competition Commissioner Margrethe Vestager said
that Apple’s effective corporate tax rate was much lower than expected.
At the time,
many global companies used the Double Irish structure to pay corporate tax on a
fraction of your actual profit. Apple claimed that everything was legal, and
the Irish government sided with Apple — probably because the huge fine would be
bad for business.
European
governments lobbied to put an end to the Double Irish back in 2014. Apple moved
some of its international cash to the tiny island of Jersey around the same
time.
For now, the
pile of cash is sitting in an escrow account. Apple appealed the European
Union’s decision back in 2016. This process could take up to five years, which
means that the Irish government won’t see Apple’s money anytime soon.
If you’ve
been following European tax reforms, you know that France, Germany, Spain and
Italy were discussing a reform to tax big tech companies based on actual
revenue in each European country. This way, tech companies wouldn’t be able to
report profit in just one country with a lower corporate tax rate.
But it looks
like this reform is now stuck as some European countries disagree with this
reform. You need everybody on board to pass this kind of reforms. For this
reason, it’s unclear if it’s going to happen at all.
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