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Apple To Start Paying $16B Tax Bill To Ireland In March, But Appeal To The European Commission Continues

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Apple will start paying its €13 billion (roughly $16 billion) tax bill to Ireland in March and should manage to pay the entire amount until September, according to a new report.

Both Apple and Ireland, however, are still battling the European Commission until the matter is solved once and for all.

Apple Ireland Taxes And E.C. Woes

Back in 2016, after a three-year investigation, the E.C. ruled that Apple enjoyed a special tax regime in Ireland, paying only corporate taxes at a rate of 1 percent instead of the standard 12.5 percent corporate tax. Consequently, the E.C. said that Apple should pay Ireland billions worth of back taxes.

Although the money would go to the government, Ireland said it did not agree with the E.C.'s ruling and it would stand beside Apple to appeal it. At the time, Apple CEO Tim Cook said that Apple never requested, nor ever received, special treatment from Ireland.

Apple To Start Paying Back Taxes To Ireland

Although it does not agree with the E.C.'s ruling, Ireland has to collect the money until the legal dispute ends. Apple will make the payments and report the money on its balance sheet as restricted cash.

Irish outlet RTé now reports that Ireland will start collecting back taxes from Apple in March, and payments could keep going through September, although both Apple and Ireland continue to fight the E.C.

The money will go in an escrow account for now, which will be set by the end of March. Derek Moran, the Secretary General of the Irish Finance Department, told the Committee in a letter that due to the scale and nature of the matter, it's impossible to offer a specific date for when Ireland will complete collecting the recovery process.

"However, identification of the escrow agent/custodian by the end of March 2018 will then allow for a payment into the escrow fund account, with payments continuing through the course of April, May and June and up to the end of September 2018," said Moran.

Appeal Could Take Years

It's tough to tell for now how the process will end as neither party is backing down. The E.C. claims that Apple had an unfair advantage in Ireland from 1991 until 2007 as the Irish government allowed it to move money from Europe via two Ireland-based head office subsidiaries. Apple challenged these claims every step of the way, arguing that the E.C. made "fundamental errors."

The Irish government also said multiple times that it did not give Apple any special treatment and it does not make such tax deals. The appeal with the E.C.'s highest courts will likely take years, but Apple expects to overturn the E.C.'s ruling. If Apple and Ireland win the case, the $16 billion put in escrow will return to Apple.

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