Business

Irish government faces EU legal action over €13bn Apple tax bill

The Irish government faces EU legal action over failing to recover €13 billion in tax from Apple
The Irish government faces EU legal action over failing to recover €13 billion in tax from Apple The Irish government faces EU legal action over failing to recover €13 billion in tax from Apple

THE Irish government is facing legal action from the EU for failing to recover €13 billion (£11.5 billion) in tax from US tech giant Apple.

The European Commission said Ireland had not recouped any of the money despite a year passing since it ruled that the iPad and iPhone maker had gained an illegal advantage over other businesses by paying significantly less tax.

While the competition watchdog slapped the country with a deadline of January 3 this year, the Republic is no closer to raking in the funds and is only expected to have pinpointed the exact amount of aid it dished out to Apple by March 2018.

Margrethe Vestager, Europe's competition commissioner, said member states "need to make sufficient progress" to restore competition.

The landmark ruling followed a three-year investigation in which the Commission discovered that Apple had paid just 1 per cent tax on its European profits in 2003 and 0.005 per cent in 2014.

The Brussels competition referee found the arrangements dating back to the early 1990s were illegal under state aid rules and gave Apple favourable treatment over other businesses.

It revealed that Apple was paying 50 euro in tax on every one million euro of profit it made in 2014.

The Irish government said it was disappointed with the European Commission's action, describing it as "extremely regrettable".

"We have always been clear that the government is fully committed to ensuring that recovery of the alleged Apple state aid takes place without delay and has committed significant resources to ensuring this is achieved," the Department of Finance in Dublin said.

"Ireland has made significant progress on this complex issue and is close to the establishment of an escrow fund, in compliance with all relevant Irish constitutional and European Union law."