Ireland has struck a deal with Apple to collect up to 13 billion euros ($19.7 billion Cdn) in back taxes and hold it in an escrow account pending an appeal before the European Court of Justice. It has taken just over a year, but Apple and Ireland have finally reached an agreement to start collecting the money and placing it into an escrow account.
In August in 2016, the European Commission (EC) ordered Apple to pay as much as $14.5 billion in taxes and interest after ruling that a deal with the Irish government illegally granted undue tax benefits to the iPhone vendor.
The Government is required under European Union rules to engage in a tendering process. It is important that we send a strong message that Ireland remains an attractive and stable location of choice for long-term substantive investment. However, Dublin as well as Apple continue to contest the European Commission's ruling. The deadline for Ireland to recover the money expired in January 2017.
For several years, Apple has only been paying one per cent on corporation tax in Ireland, but this was due to an agreement between the firm and the country.
As a result of both parties contesting the ruling, the matter is now awaiting a European Court of Justice decision, and the money will be paid into the escrow account in the interim.
We understand that some would like to change the tax system so multinationals' taxes are spread differently across the countries where they operate, and we know that reasonable people can have different views about how this should work in the future.
Both Apple and Ireland have argued against the ruling.