The nine-year saga between Apple, the Irish government, and the EU ended last year when the final appeal ordered the iPhone maker to pay €13B ($15B) in back tax to the Irish government.
That money sat in an escrow account for many years, increasing in value to €14.25B ($16.5B), but has now been paid …
The end of a nine-year saga
Apple funneled the revenue from all its sales throughout the EU through its European HQ in Ireland. Apple likely chose the location because the country already had an extremely low rate of corporate tax compared to other EU countries, at just 12.5% – and the Irish government further sweetened the deal with special arrangements that meant the iPhone maker paid even less, with some estimates putting the effective rate below 2%.
In 2016, the EU ruled that these arrangements were illegal. It was the Irish government, rather than Apple, which was found to have broken the law, but because the arrangement was not lawful it meant that Apple owed the taxes that should have been collected.
As both Apple and the Irish government appealed, it was agreed that Apple would pay the sum into an escrow account, where it would be held pending the outcome of the court battle.
Apple won the initial appeal, the judges telling the EU it had not proven that Apple had been given an economic advantage, but the EU appealed to a higher court in September of last year. As we predicted, the initial appeal was overturned, and Apple was ordered to pay.
During the long drawn-out legal battle, it was agreed that Apple would deposit the money into an escrow account. This is a bank account controlled by the courts, with the money set to be transferred to the Irish government if the EU won, or returned to Apple if it didn’t.
The escrow funds were placed into low-risk investments, meaning the balance could increase or decrease over time. By last summer, the fund had lost almost a billion dollars in value. However, it since recovered, and was up in value by a billion by the time the final sum was transferred to the Irish government.
As Engadget spotted, the government confirmed this week that the funds have now been fully paid, and the escrow account has been closed.
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