Apple Begrudgingly Agrees To Pay Ireland $20 Billion In Back Taxes

Apple, whose CEO Tim Cook likes to talk a big game about how the tech industry should be more socially responsible while overseeing an international 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.

Photo: AP

In 2016, the European Union decided that a sweetheart tax deal in which Apple routed its European profits through Ireland broke the law, saying the arrangement constituted illegal state aid as similar tax rates were not made available to Apple's competitors.

Both Apple and Ireland dragged their feet on the repayment as they appealed the decision in court. While one might wonder why the Irish government might turn up its nose at $20 billion, by offering annual tax rates as low as 0.005 per cent for over a decade, Ireland essentially acted as a tax haven - a status it has used to attract investment and presence by international corporations. For example, a similar deal between Amazon and Luxembourg resulted in the tech giant hiring some 1500 employees there, simultaneously reducing the tax burden on its European operations by approximately 75 per cent.

These international tax havens allow major companies to stash away huge piles of money that would otherwise be taxed in their home countries. Though some governments have responded with the tax holiday workaround - essentially meeting the companies in the middle by offering temporary tax breaks to bring the money home - that's backfired big time. Such tax holidays seem to have actually encouraged the companies to horde the money overseas until they could use it to finance stock buybacks and huge payouts to corporate executives nearly tax-free.

The situation has gotten tenser in recent years, with EU members' finance ministers urging adjustments to the law that could jack up multinationals' tax burdens.

Apple's agreement on Monday has set the wheels in motion for the $20 billion to actually be delivered, with Irish officials saying they expected the first payments to be processed in early 2018. Per the Journal, the European Commission says it will not close court proceedings against Ireland until all of the money is transferred.

Apple insists it did nothing wrong and that eventually, its Irish treasure horde will be returned to Cook and crew.

"We have a dedicated team working diligently and expeditiously with Ireland on the process the European Commission has mandated," the company told the Journal in a statement. "We remain confident the General Court of the EU will overturn the Commission's decision once it has reviewed all the evidence."

[Wall Street Journal]

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Comments

    while overseeing an international tax-avoidance regime

    You better have evidence, or start talking to a lawyer.

    They pay all the taxes they are legally obliged to pay.
    If governments don't like that, they should change the tax laws they made.

      You don't think that being the CEO is sufficient evidence?

      Ha, if you did something similar the ATO would have you in jail before you could blink.

        ATO is a tiny tiny nothing organisation in comparison to the behemoth legal & financial teams of huge multinationals like Apple. The ATO needs talent they will never get. The public service pays abysmally in comparison to the vast sums of money you get from such firms. Add to that the very large accounts these teams have backing them and they can run rings around the ATO all day. Hell it's a sport.

    good now they can start looking to operate ethically in other countries where they have paid no tax for decades, depsite making liberal use of tax payer funded infratsructure to turn a profit.

    Just pay the money you dogs and while you're at it, pay the money you owe Australia.

    The problem is $20B is a drop in the ocean when they have $250B in the bank.

    I'd do an "Apple Tax", specifically targeting Apple, charging them 30% tax on revenue as they can't be trusted to pay 30% on profits. I know other companies have tax avoidance strategies, but none on the scale of Apple. They need to be made an example of.

    If they don't like it, they can stop selling products here, they barely pay any tax anyway. The government spends a fortune on Apple devices for their employees so removing them from sale would actually gain a profit for Australian taxpayers.

    While one might wonder why the Irish government might turn up its nose at $20 billion
    Thats the baffling thing, they already know the tax haven is burned... they should grab the money and run. Also it might be hard for them in the next election if they talk taxes and budget when they have to explain WHY THEY DON'T have $20 Billion in surplus.

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