Economy

Ireland to reluctantly collect tax windfall from Apple

Ireland to reluctantly collect tax windfall from Apple

Apple, whose CEO Tim Cook likes to talk a big game about how the tech industry should be more socially responsible while overseeing an worldwide tax-avoidance regime that puts Scrooge McDuck's gold-filled vault/swimming pool to shame, has agreed to repay Ireland €13 billion ($20 billion) in unpaid taxes, the Wall Street Journal reported.

The EU said it planned to refer Ireland to the European Court of Justice for failing to recover the money in back taxes from Apple.

In August 2016, Vestager said the tax deal struck between Apple and Ireland for the period 2003 to 2014 was illegal state aid.

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On Monday, the Irish government said that an agreement had been reached "in relation to the framework of the principles that will govern the escrow arrangements," so that the country can begin collecting about $15 billion in unpaid taxes from Apple as early as next year.

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Apple agreed to place the money into escrow, but as $15B escrow funds aren't exactly available as off-the-shelf financial products, and the iPhone maker believes it will get its money back when a court finally rules, it wanted to negotiate the terms of the escrow fund - presumably to ensure that it is earning a decent return.

What did Apple do exactly to warrant a payment as big as €13 billion?

The European Union in 2016 launched a fresh crackdown over taxes paid by tech giant Apple.

The BBC reports that Apple is paying the money into a so-called blocked "escrow" account and that Ireland is in the process of appealing the Commission's decision. The ruling obliges Apple to pay back €13bn.

In a statement, Apple said that it remains confident the court will overturn the commission's decision once it has reviewed the evidence.