EU set to rule that Apple must pay Irish Government massive tax bill

29 Aug 2016

The EU is expected to rule in coming days that Apple’s tax arrangements with the Irish Government were illegal under state aid rules, a decision that is expected to land the tech giant with a huge tax bill.

The EU has long been analysing the tax arrangements that exist between Ireland and Apple, and now an EU ruling is expected to declare it as a form of illegal state aid.

According to The Irish Times, the ruling could be announced as early as tomorrow (30 August), according to people it cites as having being briefed on the situation, with the decision resulting in Apple being required to pay the Irish Government a substantial sum.

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News of the ruling came after ministers in Ireland received a memo stating that the Irish Government would contest such a ruling, along with Apple, which has previously stated that it would do so.

If the ruling were to go ahead, the Revenue Commissioners would be required to establish a figure for how much would be owed by Apple and would then be required to pursue Apple for this sum.

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As for how much this is likely to be, previously estimated worst case scenario suggestions of €19bn are believed to be very unlikely, with one minister suggesting a figure closer to €100m is more likely.

In preliminary findings in 2014, European antitrust authorities said Apple’s tax arrangements were improperly designed to give the company a financial boost in exchange for creating jobs in Ireland, a finding the Irish Government and Apple have always vehemently denied.

Given the inevitable appeals from both the Government and Apple, the EU ruling could see the money owed to Ireland kept to one side until the appeal process has been completed.

Ministers within Government, speaking with The Irish Times, have spoken about what will happen should both Apple’s and the Government’s appeals fail.

If Ireland was to receive such a large sum of money, it has been insisted that the State would not be able to use it for anything but paying off the country’s billions of euro of national debt.

Apple store image via Tooykrub/Shutterstock

Colm Gorey was a senior journalist with Silicon Republic