Apple will repay billions in owed taxes to Ireland

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Apple will repay billions in owed taxes to Ireland

Last year, the European Commission ruled that Apple had taken part in an illegal deal with the Irish government and that the company owed around $14.5 billion in back taxes.

In 2016, the European Union decided that a sweetheart tax deal in which Apple routed its European profits through Ireland broke the law, saying the arrangement constituted illegal state aid as similar tax rates were not made available to Apple's competitors.

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Apple agreed to place the money into escrow, but as $15B escrow funds aren't exactly available as off-the-shelf financial products, and the iPhone maker believes it will get its money back when a court finally rules, it wanted to negotiate the terms of the escrow fund - presumably to ensure that it is earning a decent return.

Speaking in Brussels, Irish finance minister Paschal Donohoe said: "We have now reached agreement with Apple in relation to the principles and operation of the escrow fund". While one might wonder why the Irish government might turn up its nose at $20 billion, by offering annual tax rates as low as 0.005 per cent for over a decade, Ireland essentially acted as a tax haven - a status it has used to attract investment and presence by global corporations.

It's understood that Apple will start paying the €13 billion in back taxes into an escrow account in first quarter of 2018.

Ireland was formally referred to the European Court of Justice after it failed to implement a 2016 order that required the island nation to collect the same amount in unpaid taxes.

According to the EU, the tax deal allowed Apple to pay nearly nothing in tax on its European profits between 2003 and 2014. However, Dublin as well as Apple continue to contest the European Commission's ruling. The Cupertino, Calif. -based tech company said in a statement that it remains confident the court will overturn the ruling once evidence has been reviewed.

Apple insists it did nothing wrong and that eventually, its Irish treasure horde will be returned to Cook and crew.

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