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Wall Street Journal / Tech - Game

Apple Agrees to Deal With Ireland Over $15 Billion Unpaid Tax Issue

Ireland will begin collecting $15.46 billion in back taxes from Apple as soon as early next year after both sides agreed to the terms of an escrow fund for the money, Ireland’s finance chief said.
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Natalia Drozdiak

BRUSSELS—Ireland will begin collecting €13 billion ($15.46 billion) in back taxes from Apple Inc. as soon as early next year after both sides agreed to the terms of an escrow fund for the money, Ireland’s finance chief said Monday.

The European Union in 2016 ordered Dublin to retrieve the billions of euros from Apple in uncollected taxes, which the EU said Apple avoided paying with the help of sweetheart tax deals from Ireland.

A year after that decision, however, Ireland still hadn’t recouped the money, leading the EU in October to refer Dublin to the bloc’s highest court, the European Court of Justice, for failing to implement the decision.

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Ireland has said the money collection was held up by negotiations over the escrow account, which will hold the company’s dues while both Apple and Ireland appeal the EU’s 2016 decision in court.

Irish Finance Minister Paschal Donohoe Monday said he expected the flow of money from Apple to begin in the first quarter of 2018 once they complete the tendering processes to determine who would operate the account and who would then manage the fund.

The Irish finance chief made the remarks to reporters ahead of a Monday meeting with EU antitrust chief Margrethe Vestager. Mr. Donohoe said he called the meeting with the competition commissioner to brief her on the latest developments.

The European Commission said Monday it would only close the court procedure against Dublin for failure to implement the 2016 decision once Ireland recovers the amount in full.

In its 2016 decision, the European Commission said tax arrangements that Ireland offered Apple in 1991 and 2007 allowed the company to pay annual tax rates of between 0.005% and 1% on its European profits for over a decade to 2014 by designating only a tiny portion of its profit as taxable in Ireland. The commission had given Ireland until January 3, 2017 to recover the money.

In a statement, Apple said, “We have a dedicated team working diligently and expeditiously with Ireland on the process the European Commission has mandated. We remain confident the General Court of the EU will overturn the Commission’s decision once it has reviewed all the evidence.”

Write to Natalia Drozdiak at natalia.drozdiak@wsj.com

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