Wednesday, 19 September 2018 07:37

EU drops Ireland case after Apple pays back-taxes

EU drops Ireland case after Apple pays back-taxes Pixabay

The European Commission, the executive arm of the European Union, has said it will drop a case against Ireland, filed in the wake of its imposition of a back-taxes bill of €13.1 billion (US$17.6 billion) on Apple two years ago, after the Cupertino-based company paid its dues.

EU competition commissioner Margrethe Vestager filed the case against Ireland for having failed to recover the outstanding amount, Reuters  reported.

Apple paid the first instalment in May, depositing €1.5 billion (US$1.76 billion) in an escrow account set up for this purpose.

The fine was imposed on Apple in August 2016 with the EU claiming that a number of deals the company had struck in order 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.

eu apple

Both Apple and Ireland have appealed 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 said it was taking Ireland to the European Court of Justice over delaying the payment.

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.

Commission spokesman Ricardo Cardoso told Reuters by email: "In light of the full payment by Apple of the illegal state aid it had received from Ireland, Commissioner Vestager will be proposing to the College of Commissioners the withdrawal of this court action."

Graphic: courtesy the European Union

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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