Apple's disputed Irish tax account loses $1 billion
William GallagherApple Ireland
While the EU continues to appeal against Apple's tax deal with Ireland, alleged back taxes have been held in escrow — but the fund is shrinking.
Apple's on/off dispute with the EU over its tax payments in Ireland is still continuing, with a 2016 ruling going against Apple, and a 2020 one backing up the company. As the European Commission is taking the case to the Court of Justice of the European Union, the money Apple may owe in back taxes is being held in an escrow account.
The amount was 14.3 billion euros ($12.25 billion), but it shrank by 16 million euros in 2018. Now according to The Irish Times, the amount being held has fallen again — and dramatically.
In the last year, the fund's value declined by some 259 million euros ($283 million). Together with the 2018 loss and all years in between, the account now contains under 13.4 billion euros, for a decline of almost a billion euros.
Some 6 million euros ($6.5 million) of the decline in the last year is said to be down to operating expenses. Those are presumably annual, but there are two more major reasons for the decline.
One is the escrow account consists chiefly of investments rather than cash, and European bonds have been seeing negative rates.
However, the other reason is according to The Irish Times, Apple is allowed to take money out of the escrow account in order to pay tax in other jurisdictions. It's not clear what the jurisdictions are, or whether there are limitations on what Apple can withdraw.
The dispute stems from how Ireland used to allegedly be a tax haven for multinational corporations. That has ended since this legal battle began, with Ireland signing up to an international Organization for Economic Cooperation and Development tax agreement in 2021.
Ireland has maintained throughout the entire process that Apple paid what it owed, legally, and properly.
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8 Comments
Great, another dodge.
To be clear about this, Ireland is 100 percent correct in its view that this is really a dispute between Ireland and the EU that doesn’t actually involve Apple — because Ireland made similar deals to other multinationals you *never hear about*, such as Starbucks.
Ireland won its appeal, which means that the court viewed the deals as legal at the time they were made. Apple is only being singled out because it has the deep pockets to be able to escrow the amount the EU thinks should have been charged.
It will be a grand day when that money, whatever is left of it, falls back into Apple’s coffers. It won’t change the world, or even the stock price, much, but a modicum of rationality will have been restored to the world.