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Apple agrees to pay Ireland $15.4 billion in back taxes to appease EU

Apple agrees to pay Ireland $15.4 billion in back taxes to appease EU


But the company is still appealing the decision

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Apple today reached an agreement with the European Union to begin depositing the €13 billion ($15.4 billion) in back taxes it was ordered to pay Ireland last year, following the landmark decision to crackdown on tax shelter policies and profit offshoring, according to The Wall Street Journal.

Despite the ruling having been issued more than a year ago, in August of 2016, Ireland has resisted collecting the money. The country strategically uses low tax rates to spur domestic investment from foreign corporations. But the practice has resulted in companies like Apple effectively using Ireland as a tax shelter, paying rates of as little as 0.005 percent on all European profits between the years 2003 and 2014 thanks to subsidiaries and shell companies designed solely to collect and maintain offshore revenue. Apple has long challenged this characterization of its tax schemes, with CEO Tim Cook calling the EU Commissioner’s ruling “total political crap.”

Because of Ireland’s inaction, the EU referred the country’s government to the European Court of Justice, the highest court of the bloc’s governing body, to compel it collect the back taxes. Irish Finance Minister Paschal Donohoe then announced today that Ireland expected money from Apple to start flowing into an escrow account starting in the first quarter of 2018.

Both Apple and the government of Ireland are appealing the ruling, and it appears Apple executives expect to recoup the money if successful. “We have a dedicated team working diligently and expeditiously with Ireland on the process the European Commission has mandated,” Apple said in a statement given to the WSJ. “We remain confident the General Court of the EU will overturn the Commission’s decision once it has reviewed all the evidence.”