Apple pays Ireland record shattering $15 billion lump sum to settle tax dispute

Ahead of an upcoming appeal of a 2016 tax ruling, Apple has paid the equivalent of over $15 billion to the Irish government to settle claims of underpayment of tax to the European Union.

Apple has paid the entire 13.1 billion euro outstanding balance of its disputed taxes to the government of Ireland, Reuters reported Tuesday, citing Ireland's finance minster.

In addition to the 13.1 billion ($15.3 billion in U.S. dollars), Apple has paid an additional 1.2 billion euros ($1.4 billion) in interest.

The reason for the payments is a 2016 ruling by the European Commission finding that Ireland must collect billions in back taxes from Apple. The ruling found that the Irish government had extended preferential tax treatment to Apple, which has long had its European headquarters in that country. The EU does not allow individual member states to give companies benefits not available elsewhere in the EU.

Both Apple and Ireland are appealing the ruling, and the appeal is expected to start this fall. As of early August, Apple had paid $10.4 billion of the $15.3 billion balance.

In February, the EU said it might drop a court case against the Irish government if it succeeded in covering the money owed by Apple.

The 14.3 billion euros, Reuters said, is enough to fund Ireland's health service for a year.

Irish history

Apple has done business in Ireland since 1980, and currently has about 6,000 employees there, as well as a large community of app developers.

The company has taken advantage of the ability to pay lower taxes as a result of its presence in Ireland, but when Tim Cook visited the country in June, he said Apple's Ireland presence goes beyond that.

"Honestly speaking, we didn't come to Ireland for tax," Cook told an Irish newspaper during his visit. "We came to Ireland in 1980 because we saw a community we thought we could grow, and could do a number of things to support the continent. We've stayed on course on that over almost four decades. It hasn't been a straight line - life isn't a straight line, things go up and down - but it's always been in a trajectory that is increasing. I don't anticipate that changing."

In May, Apple canceled its Athenry data center project in Ireland, citing delays in the approval process. On his visit, Cook made clear that Apple has no plans to leave Ireland.