Paul Faith | AFP | Getty Images
A view of buildings on the Apple campus in Cork, Ireland.
Apple today reached an agreement with the European Union to begin depositing the €13 billion ($15.4 billion) in back taxes in which was ordered to pay Ireland last year, following the landmark decision to crackdown on tax shelter policies along with 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 coming from foreign corporations. however 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 along with 2014 thanks to subsidiaries along with shell companies designed solely to collect along with maintain offshore revenue.
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Apple has long challenged in which 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 in which collect the back taxes.
Irish Finance Minister Paschal Donohoe then announced today in which Ireland expected money coming from Apple to start flowing into an escrow account starting within the first quarter of 2018.
Both Apple along with the government of Ireland are appealing the ruling, along with in which appears Apple executives expect to recoup the money if successful. “We have a dedicated team working diligently along with 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 in which has reviewed all the evidence.”