Minister Donohoe says date for payment of Apple tax is still unclear

25 Oct 2017

The European Court of Justice. Image: Peter Fuchs/Shutterstock

Ireland could face fines for failing to set up an escrow account for the €13bn in taxes owed by Apple.

The Apple tax saga rolls on following a crackdown from the European Commission.

Minister for Finance Paschal Donohoe, TD, told the Dáil yesterday (24 October) that the Government cannot say exactly when Apple will pay its $13bn in back taxes, according to a report in The Irish Times.

The discussion comes after Ireland was served legal notice by the European Commission (EC) earlier in October after it found that Apple had been a recipient of illegal state aid. The deadline set by the EC in August 2016 was 3 January 2017, and Ireland has yet to retrieve the money.

Apple tax – a complex case

Donohoe cited “complexity and commercial sensitivity” as the reason that a date has yet to be nailed down.

He also mentioned that the sheer size of the payout was affecting the proceedings. The Government is the process of procuring an escrow account for the funds and is in discussions with an unnamed company. It is understood that the money may not be paid before 2017 draws to a close.

The EC had said ‘selective treatment’ allowed Apple to pay a tax rate of just 1pc on EU profits in 2013, dropping to 0.005pc the following year.

Donohoe warned that Ireland could be liable to pay penalties: “Fines may occur on foot of Ireland’s failure to comply with a judgment of the European Court of Justice [ECJ]; the level of fines is at the discretion of the court.”

Following the referral to the ECJ, the Department of Finance stated: “It is extremely regrettable that the commission has taken this action, especially in relation to a case with such a large-scale recovery amount.

“Ireland has made significant progress on this complex issue and is close to the establishment of an escrow fund, in compliance with all relevant Irish constitutional and European Union law.”

Donohoe’s department also described the move as “wholly unnecessary”.

The European Court of Justice. Image: Peter Fuchs/Shutterstock

Ellen Tannam was a journalist with Silicon Republic, covering all manner of business and tech subjects