EU admits Apple missed deadline to create €13bn tax fund as appeal continues

31 Jan 2017

Ireland flag flying outside the European Commission. Image: Alexandra Lande/Shutterstock

After trying to persuade Apple to set aside an escrow account of €13bn for the ongoing dispute that alleges Ireland is owed money in back taxes, the EU has admitted defeat.

Last December, the Irish Government lodged its first formal objection of the European Commission (EC) claim that it is owed as much as €13bn in taxes.

The accusation made in August 2016 is that despite Apple having an operation of more than 5,000 staff in Ireland, the Government has been offering illegal tax benefits amounting to a corporate tax rate of just 1pc over a number of years.

Not interfering in tax sovereignty

As part of the decision led by the EC and its competition commissioner Margrethe Vestager, Apple was asked to set aside the €13bn in an escrow account while it deals with both appeals from the company and the Irish Government.

Now, according to RTÉ News, Vestager has admitted that Apple has missed the deadline on creating the account, offering an insight into how the tech giant views the situation.

Vestager also strongly denied that the EC had attempted to interfere in Ireland’s tax sovereignty, but she suggested that this might not be the last time that Ireland’s corporate tax rate and relationships with multinational companies are put under scrutiny.

Ahead of her appearance with the Dáil finance committee, Vestager said to RTÉ News that Ireland is still “working on the recovery” of finances for the account.

Deadline not the most important thing

“Obviously it’s a very complex thing because it’s a lot of money. The deadline has been passed, but that’s not the most important thing,” she said.

“Of course, the important thing for us is to have a constructive cooperation with the Irish authorities in order, eventually, to get it done.

“It is for the Irish to do the fine calculations because they have all the numbers in every detail.”

Meanwhile, the Department of Finance has reiterated that it is working with all parties to resolve the dispute and that it is “satisfied with the progress” it is making.

Not just US companies targeted

When pressed about claims that the EC was specifically targeting American multinationals within the EU, Vestager said European ones are also monitored.

“What we do here is to make sure that companies doing business in Europe follow European rules. You see a number of American companies, you see a number of European companies as well,” she said.

“What it boils down to is the very fundamental. If you do business in Europe, follow the rules that we agreed on as Europeans.”

Ireland flag flying outside the European Commission. Image: Alexandra Lande/Shutterstock

Colm Gorey was a senior journalist with Silicon Republic