Apple Has Paid the $14.3 Billion It Owes the Irish Tax Authorities—But the Check Hasn’t Cleared Yet
Apple has handed over €14.3 billion ($16.7 billion) to the Irish government, representing the taxes it owed under a 2016 ruling by the European Commission, plus interest.
A couple years back, the Commission’s competition directorate decided that Apple had benefited from €13 billion in illegal state aid from Ireland, and told the Irish authorities to recover the money.
Competition Commissioner Margrethe Vestager has been going after the extremely low tax rates paid by some multinationals in the EU as a competition issue, based on the fact that some giants get them but smaller competitors do not.
In the case of Apple and Ireland, Apple (AAPL) was paying an effective corporate tax lower than 1%, thanks to deals struck with the authorities there in 1991 and 2007. The standard corporate tax rate in Ireland is 12.5%—though on the other hand, Apple provides thousands of jobs in Ireland, which is its international base.
Vestager confirmed Tuesday that Ireland had received the sum in full, after payments began in May.
The money isn’t in the Irish tax authorities’ coffers just yet, though. Apple is still appealing the Commission’s decision, so it’s in an escrow account until that case is over.
Meanwhile, the Commission said Wednesday that it was dropping a similar case involving McDonald’s (MCD) and Luxembourg. Vestager’s department took three years to probe the fast food chain’s tax arrangements in the tiny European country, but she said “the reason for double non-taxation in this case is a mismatch between Luxembourg and U.S. tax laws, and not a special treatment by Luxembourg.”
Vestager’s directorate has decided the other way in a few other cases involving Luxembourg, including one about Amazon.