Ireland will go to EU Court of Justice over Apple tax bill

4 Oct 201739 Shares

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Ireland is heading to court over the Apple tax debacle. Image: Zhao jian kang / Shutterstock.com

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Ireland’s failure to recover the gigantic tax bill due from Apple sees the EU taking legal action.

Last year, the European Commission ordered Apple to pay some €13bn in taxes to Ireland as it had found the firm was a recipient of illegal State aid.

Ireland’s deadline for a decision to be made around the collection of the tax bill was 3 January and the commission said that, in the months following this, Apple has still been reaping the rewards from this illegal advantage.

EU Commission cracks down on Apple tax

Margrethe Vestager, the commissioner in charge of competition policy, said in a statement: “Ireland has to recover up to €13bn in illegal State aid from Apple. However, more than one year after the commission adopted this decision, Ireland has still not recovered the money, also not in part.

“We 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.”

The European Commission also noted that though Ireland has made progress on calculating the precise amount owed by Apple, this work would not be finished until March 2018 at the earliest.

The Irish response

The Department of Finance responded to the statement from the Commission, saying the action taken is “wholly unnecessary”.

“We have always been clear that the Government is fully committed to ensuring that recovery of the alleged Apple State aid takes place without delay and [have] committed significant resources to ensuring this is achieved. Ireland fully respects the rule of law in the European Union. That is why it is extremely disappointing that the commission has taken action at this time against Ireland,” reads the department statement.

“Irish officials and experts have been engaged in intensive work to ensure that the State complies with all its recovery obligations as soon as possible, and have been in constant contact with the European Commission and Apple on all aspects of this process for over a year.

“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. The work on the establishment of the escrow fund to deal with the unprecedented recovery amount will continue, notwithstanding the fact that [the] Commission has taken this wholly unnecessary step.”

Above image taken from inside an Apple store in Shanghai, China. Image: Zhao jian kang/Shutterstock

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

editorial@siliconrepublic.com