Home Technology Regulation Apple deposits first tranche of EU fine for alleged tax evasion
Apple deposits first tranche of EU fine for alleged tax evasion Featured

Apple has paid the first instalment of a fine levied by the European Union for alleged tax evasion, depositing €1.5 billion (US$1.76 billion) into an escrow account set up for the purpose.

Reuters reported that an announcement to this effect had been made by Irish Finance Minister Paschal Donohoe on Friday.

The EU imposed a €13 billion (US$17.6 billion) fine on Apple in August 2016, claiming that a number of the deals that the company had cut to do business in Ireland were illegal.

The EU said at the time that it had concluded that Ireland granted undue tax benefits to Apple.

Both Apple and Ireland are appealing the verdict, a process that may take as long a five years. The first tranche of the fine was due in January 2017 and in October 2017, the European Commission, the EU's executive arm, said it was taking Ireland to the European Court of Justice over delaying the payment.

eu apple

Apple and Ireland reached agreement over what was deemed a suitable escrow arrangement in December 2017. In March, Ireland put Amundi, BlackRock Investment Management and Goldman Sachs Asset Management in charge of the escrow account and gave them authorisation to make low-risk investments that would not put Irish taxpayers at risk.

At the time of announcing the fine, EU competition commissioner Margrethe Vestager said Apple's "selective treatment" in Ireland resulted in an effective tax rate of 1% on its European profits in 2003. This rate fell to 0.005% by 2014.

"The tax treatment in Ireland enabled Apple to avoid taxation on almost all profits generated by sales of Apple products in the entire EU single market," she said.

"Member states cannot give tax benefits to selected companies – this is illegal under EU state aid rules. 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."

Graphic: courtesy the European Union

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A professional journalist with decades of experience, Sam for nine years used DOS and then Windows, which led him to start experimenting with GNU/Linux in 1998. Since then he has written widely about the use of both free and open source software, and the people behind the code. His personal blog is titled Irregular Expression.

 

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