Apple tax battle: Ireland has paid millions in legal fees

30 May 2018516 Views

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Apple logo on shopfront. Image: Vytautas Kielaitis/Shutterstock

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Fees related to Ireland’s legal wrangling with the European Commission have been mounting over the past few years.

It has been almost two years since the European Commission (EC) ruled that Apple had received unfair tax incentives from Ireland.

European competition commissioner Margrethe Vestager issued an outcome on the issue in August 2016, ordering the tech giant to pay the State €13bn after a three-year investigation into its business practices.

At the time, she said: “The commission’s investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years.

“In fact, this selective treatment allowed Apple to pay an effective corporate tax rate of 1pc on its European profits in 2003 down to 0.005pc in 2014.”

According to The Irish Timesthe State has paid more than €4.5m in legal fees relating to its battle with the EC over the State aid ruling. Approximately €5.8m has been paid in fees related to the case, with consultancy fees also included here. Law firm William Fry has received fees of €2.57m since 2016 for work carried out on the case.

Apple tax debate continues

In October of last year, the commission announced it would be taking Ireland to the European Court of Justice to deal with delays in recovery of the money, which was due to be recovered in January 2017, about four months after the original 2016 ruling was handed down.

At that point, Vestager said: “We [the European Commission] of course understand that recovery in certain cases may be more complex than in others, and we are always ready to assist. But member states need to make sufficient progress to restore competition. That is why we have today decided to refer Ireland to the EU court for failing to implement our decision.”

Both Apple and the State are appealing the EC’s ruling. Finance Minister Paschal Donohoe, TD, recently said that Ireland has never accepted the analysis from EU regulators but has still engaged with the EC throughout the extensive investigation.

Ireland has received first payment

Earlier in May, Donohoe confirmed that Apple had paid €1.5bn into an escrow account created by the Government to hold the funds. It is the first in a series of payments, with the remaining tranches expected to be paid into the fund during the second and third quarters of this year.

Discussing the fund, Donohoe added: “There will be no further official comment on collection of the alleged State aid until the full recovery has been effected, which is expected by the end of third quarter of 2018.”

Apple logo on shopfront. Image: Vytautas Kielaitis/Shutterstock

Updated, 4.10pm, 30 May 2018: This article was updated to correct a mistaken figure and clarify that approximately €5.8m has been paid in fees related to the Apple case, not €5.8bn.

Ellen Tannam is a writer covering all manner of business and tech subjects

editorial@siliconrepublic.com