Apple Finishes Paying $15.3B in Back Taxes to Ireland, Prompting EU Regulators to Drop Lawsuit

Just over two years after the European Commission ruled that Apple was receiving illegal state aid from Ireland -- where it had reportedly paid less than 2 percent in taxes compared to the country's headline 12.5 percent corporate tax rate -- Apple has now paid back the entire 13.1 billion euros ($15.3 billion) it owed in back taxes (via Reuters).

The European Commission confirmed the payment this week, and furthermore said that EU antitrust regulators now plan to drop all legal action against Ireland. The EU had originally taken Ireland to court for failing to recover the $15.3 billion in tax due from Apple.

The confirmation of the withdrawal of litigation came from an email sent by European Commission spokesman Ricardo Cardoso:
“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,” Commission spokesman Ricardo Cardoso said in an email.
Although the EU gave its final ruling in August 2016 regarding Apple's tax loophole in Ireland, the regulatory body had first kicked off an investigation into Apple's tax arrangements back in 2014. The ruling eventually found that Apple was allowed to pay an effective corporate tax rate of 1 percent on its European profits in 2003, down to 0.005 percent in 2014. Specifically in 2014, Apple paid 0.005 percent tax on EU profits, which means that "For every million euros in profits, it (Apple) paid just €500 in taxes," said European Competition Commissioner Margrethe Vestager at the time.

Apple and CEO Tim Cook were adamant that the ruling was based on "fundamental errors" and Cook referred to the tax avoidance accusations as "total political crap." He elaborated, stating that Apple pays all of the taxes it owes based on the laws of each country in which it operates. Likewise, the Irish government said it did not give favorable tax treatment to Apple and added that it "does not do deals with taxpayers."

Apple and Ireland eventually moved to appeal the ruling, but as things escalated the European Commission decided to open litigation against Ireland in October 2017 for its failure to procure Apple's back taxes. Eventually, Apple began paying the back taxes it owed around March 2018, and in a report from earlier in the year sources stated that payments were expected to finish around September.

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Tim Cook Reaffirms Apple’s Commitment to Ireland After Tax Dispute and Abandoned Data Center Plans

Just weeks after Apple abandoned its plans to build a $1 billion data center in Ireland, and amid a major Irish tax dispute with the European Commission, Apple CEO Tim Cook ensures his company remains committed to the country.


In a recent interview with The Irish Times, Cook said Apple appreciated the support it received from the community who wanted the data center to be there, and reaffirmed Apple's commitment to Ireland as a whole.
"We loved the community there. Fortunately we had great support from the community who wanted us there. That's probably the biggest disappointment from our point of view; we felt we could have been in the community and made a lot of friends like we had in Cork and grown the relationship over time," Cook said. "But we understand and respect the process."
Of course, not all local residents wanted the data center there, as concerns were raised about its potential effects on local animals, flooding on a neighboring golf course, and its close proximity to a shut-down nuclear power plant.

Last October, Apple finally won approval for construction by the Irish High Court, after an appeal by two individuals against the decision was dismissed. However, the appellants decided to take their case to the country's Supreme Court, resulting in Apple abandoning its plans just before the hearing was to occur.
"Despite our best efforts, delays in the approval process have forced us to make other plans and we will not be able to move forward with the data centre," Apple said in a statement ahead of the Supreme Court heading on Thursday.

"While disappointing, this setback will not dampen our enthusiasm for future projects in Ireland as our business continues to grow," the company said, citing plans to expand its European headquarters in County Cork where it employs over 6,000 people.
Cook added that Apple "didn't come to Ireland for tax," nearly two years after the European Commission ruled that the company received illegal aid from the country, ordering it to repay 13 billion euros to the country. Apple and Ireland are both appealing the ruling, as escrow payments begin for now.
"We came to Ireland in 1980 because we saw a community we thought we could grow, and could do a number of things to support the continent. We've stayed on course on that over almost four decades. It hasn't been a straight line – life isn't a straight line, things go up and down – but it's always been in a trajectory that is increasing. I don't anticipate that changing."
Cook visited Ireland this week, where he met with the country's head of government Leo Varadkar in Dublin, before heading to Cork, where Apple's European headquarters are located. Apple recently expanded the campus with a new building that provides space for an additional 1,400 employees.


Apple's recently updated European Job Creation page reveals that it now supports 1.7 million jobs across Europe, including around 1.5 million jobs attributable to the App Store ecosystem, some 17,000 of which are based in Ireland.

Apple's website notes that it "has been based in Cork for over 35 years and now directly employs 6,000 people throughout Ireland supporting all aspects of the business." The company also says its Irish team has "doubled in size over the last five years and includes over 80 different nationalities."

All in all, this amounts to a good PR campaign for Apple, echoing much of what it said in its Message to the Apple Community in Europe a few years ago.


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Tim Cook Visits Ireland as Apple Promotes Its Support of Over 1.7 Million Jobs in Europe

Apple CEO Tim Cook has arrived in Ireland, the latest destination on his European tour, which has included stops in Italy and the Netherlands.

Apple CEO Tim Cook and Ireland's Taoiseach Leo Varadkar

Leo Varadkar, the Taoiseach or Prime Minister of Ireland, tweeted that he had a "good meeting" with Cook in the capital of Dublin on Monday. It's unclear what was discussed, but it appears to have been a routine meeting.


Cook has since headed to Cork, where Apple's European headquarters are located. There, he will formally announce an expansion of its Hollyhill campus. Apple says a new building will provide space for an additional 1,400 employees. Since 2012, Apple says it has invested nearly €220 million to develop the facility.

Apple's campus in Cork

Apple, on its recently updated Job Creation page in Europe, says it is Cork's "largest private employer" and "proud" that many of its employees in the area have worked at the company for decades.

Apple's website notes that it "has been based in Cork for over 35 years and now directly employs 6,000 people throughout Ireland supporting all aspects of the business." The company also says its Irish team has "doubled in size over the last five years and includes over 80 different nationalities."

Apple says Cork is home to its "only wholly owned manufacturing facility in the world. It provides configure-to-order iMacs which are for customers across Europe, Middle East, and Africa." AppleCare support for those regions is also based in Cork.

Nicole, a Product Quality Engineer, at Apple's iMac facility in Cork

While in Cork, Cook also visited The English Market, according to photos shared on Twitter. Earlier, in Dublin, he met with developers from Hostelworld. The app, featured on Apple's website, allows travelers to search for and book thousands of hostels in more than 170 countries around the world.


All of this amounts to good PR for Apple in Ireland, just over a month after it abandoned its plans to build a $1 billion data center in the country due to "delays in the approval process," primarily due to concerns from some local residents. Apple and Ireland are also in a major tax dispute with the European Commission.

Apple's updated Job Creation page also reveals that it now supports 1.7 million jobs across Europe, including around 1.5 million jobs attributable to the App Store ecosystem, some 170,000 jobs supported by Apple's supply chain in Europe, and some 22,000 direct Apple employees in 19 countries across the continent.

Since the App Store was created, Apple says it has now paid €20 billion to European app developers. The company says the United Kingdom leads Europe in terms of jobs linked to App Store development, at 291,000.


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Apple Ditches Plans for $1 Billion Irish Data Center, Citing Approval Delays

Apple has ditched its plans to build a $1 billion data center in Ireland because of continual delays in the approval process chiefly brought about by planning appeals by local residents (via Reuters).

Apple had been trying to get its $1 billion data center in County Galway, Ireland built for over three years, but has experienced pushback from individuals and organizations highlighting environmental protection issues.


Those against Apple's plans claimed a data center could have negative effects on local animal populations, while potential flooding concerns on a neighboring golf course were also raised. The planned site's proximity to a local nuclear power plant was later used to bring up new objections to the site's construction, despite the plant having been shut down for years.

In October 2017, Apple finally won approval for construction by the Irish High Court, after an appeal by two individuals against the decision was dismissed. However, the appellants decided to take their case to the country's Supreme Court, and while that hearing was due to go ahead on Thursday, Apple appears to have already decided to give up its fight to get the go-ahead for the data center.
"Despite our best efforts, delays in the approval process have forced us to make other plans and we will not be able to move forward with the data centre," Apple said in a statement ahead of the Supreme Court heading on Thursday.

"While disappointing, this setback will not dampen our enthusiasm for future projects in Ireland as our business continues to grow," the company said, citing plans to expand its European headquarters in County Cork where it employs over 6,000 people.
Apple's decision to cancel its plans is a blow for the Irish government, which is seeking to boost the country's economy through foreign investments. According to Reuters, the state is in the process of changing its planning laws to include data centers as "strategic infrastructure", which would allow them to get through the planning process much more quickly in future.
"There is no disputing that Apple's decision is very disappointing, particularly for Athenry and the West of Ireland," Ireland's Minister for Business and Enterprise Heather Humphreys said in a statement.

"The Government did everything it could to support this investment... These delays have, if nothing else, underlined our need to make the state’s planning and legal processes more efficient."
Apple announced in July that it would spend $921 million on a second data center in Denmark run entirely on renewable energy. Apple said the new data center would begin operations in the second quarter of 2019 and would power its online services, including the likes of iMessage, Siri, Maps, and the App Store.


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Apple Now Selling Refurbished 2017 27-inch iMac Models in Europe

Apple quietly updated several of its European online stores for refurbished products over the last couple of days, and has added its latest 27-inch 5K iMac models to the discounted listings for the first time.

The iMacs were first released in June of 2017 and feature Kaby Lake processors, faster SSDs, and AMD discrete graphics. Online stores in France, Germany, Ireland, Italy, and Spain have all been updated with the new stock, although the largest range of configurations currently appears in the United Kingdom.


In the U.K., for example, an entry-level model with 8GB RAM, a 1TB Fusion Drive, a 3.4GHz i5 processor, and a Radeon Pro 570 is priced at £1,489, which is a £260 discount off the standard price.

This is the first time the machines have been available in refurbished stores around Europe since their introduction at the 2017 Worldwide Developers Conference. Apple first began selling the refurb models in the U.S. and Canada back in August.

In addition, Apple has boosted its European stock of refurbished 21.5-inch 4K iMacs, also released in June of this year. Apple has added a range of configurations, from low-end to top-of-the-line. As with all refurbished products, stock will fluctuate regularly based on the machines Apple is getting in for repair.

All of Apple's refurbished products go through a rigorous refurbishment process before being offered for sale, which includes inspection, repairs, cleaning, and repackaging. Refurbished Macs come with a one-year warranty that can be extended with an AppleCare+ purchase. For more tips on purchasing a refurbished product, make sure to check out our guide.

Related Roundup: iMac
Buyer's Guide: iMac (Neutral)

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Apple Will Start Paying Ireland Billions Owed in Back Taxes ‘Early Next Year’

In August 2016 the European Commission ruled that Apple must repay 13 billion euros ($15.46 billion) in back taxes dating between 2003 and 2014. According to the EU, the taxes were avoided with the help of sweetheart tax deals from Ireland, and today The Wall Street Journal reports that Apple will now begin paying these back taxes "as soon as early next year."

Ireland's Finance Minister, Paschal Donohoe, reports that Apple and Ireland have agreed to terms of an escrow fund for the money, setting a pace for Apple to begin repaying the taxes in Q1 2018. Apple's payment will sit in the escrow fund while both sides continue to appeal the EU's decision in court.

In October 2017, the EU announced its intention to take Ireland to court for its failure to recover Apple's back tax sum, with Ireland citing the escrow account as the reason why negotiations and repayment were being held up. Now, Donohoe said the next steps will be to determine who operates the escrow account and who manages the fund once Apple begins the repayment process. The EU said that it will only close court proceedings against Ireland once Apple's back taxes are recovered in full.
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.

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.”
The center of the EU's argument is that Irish revenue commissioners gave Apple unfair advantages between 1991 and 2007 by allowing the company to move income from the European market through two "non-resident" head office subsidiaries based in Ireland.

Ireland's government has stated it "fundamentally disagrees" with the EU's analysis of the tax situation, leading to its appeal. For Apple, the company said that the EU made "fundamental errors" in the calculations related to the taxes it owes, arguing that the bulk of the profits during this period are due in the United States. Apple CEO Tim Cook put it more succinctly after the first ruling came out, calling the tax avoidance claims "total political crap."

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.


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Apple’s Irish Data Center Faces New Challenge as Residents Plan to Fight Back Against Court Approval

Apple has been trying to get its $1 billion data center in County Galway, Ireland built for well over two years now, and last week the company finally won approval for construction by the Irish High Court. While it was expected that Apple would now move forward and begin planning for construction, two local residents have brought up a new legal challenge for the company.

As reported by The Galway Advertiser (via Business Insider), two Athenry residents have requested a certificate to appeal the court ruling made last week that granted Apple permission for the project. The case is said to be due back to the court on Wednesday, October 25. Previously, the same individuals challenged Apple's data center by citing multiple environmental concerns, but their challenge was rejected.

Locals marching in support for Apple's data center last November (via Apple for Athenry)

Environmental protection issues have been the source of the objector's arguments for the last few years, originally arguing that Apple's data center could have negative effects on local animal populations, and could lead to potential flooding concerns on a neighboring golf course. Then, the data center's proximity to a local nuclear power plant was used to bring up new objections to the site's construction, despite the plant having been shut down for years.

Many locals still support Apple's data center in the area, with the leader of the Apple for Athenry Facebook group telling Business Insider that "the collective hearts of Athenry sank" when the new legal challenge was brought up this week.

Apple originally wanted the data center to be up and running by early 2017, but these repeated setbacks have greatly elongated the company's timeline for the site. Once it is functional, the Derrydonnell Forest data center will see ongoing construction over 10-15 years, supporting services like the App Store, Apple Music, Apple Pay and iCloud.


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Apple Maps Transit Directions Expand to Ireland

Apple Maps has added public transit directions for Ireland, as pointed out by developer Steven Troughton-Smith on Twitter. With the updated directions, users in Ireland can now choose from a few different public transportation routes when traveling around Ireland.

Transit directions are available in a few cities like Dublin and Cork, including transportation provided by Bus Éirann, Aircoach, and more. There's also support for city-specific transit options like Dublin's electric rail system the DART (Dublin Area Rapid Transit) and Dublin Bus.


Unfortunately, most of the transit options in Ireland are facing service cancellations in the face of Hurricane Ophelia, which made landfall around 1 p.m. local time. Many transit advisories listed in Apple Maps mention cancellations lasting from 10 a.m. to at least 7 p.m. local time in Ireland.

Apple has been adding public transit directions to new cities around the world since the feature first debuted in iOS 9 in 2015. Some of the latest areas to get the feature include Taiwan, Ottawa, Edmonton, Québec City, and Hungary.


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Apple Wins Approval for $1 Billion Data Center in Ireland

Apple has won approval to build a $1 billion data center in the west of Ireland, successfully fending off an environmental legal challenge brought by local residents (via Reuters).

Ireland's High Court on Thursday ruled that the proposed data center in Galway county, planned by Apple since February 2015, could proceed despite locals' various environmental concerns for the area if Apple successfully built the facility.


The residents against Apple attempted to halt construction last November by claiming that the permission it was granted by independent planning body An Bord Pleanála was invalid.

They alleged that An Bord Pleanála hadn't performed a proper environmental impact assessment of the proposed data center at Derrydonnell. Apple successfully asked the High Court to fast-track the case, and today's approval will likely bring the legal proceedings to an end.

When Apple announced the Irish data center in 2015, it also announced one for Denmark. That center is expected to begin operations later this year.


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E.U. to Take Ireland to Court For Failing to Claim Apple Tax

The European Commission said on Wednesday it will take Ireland to court for its failure to recover up to 13 billion euros ($15.3 billion) of tax due from Apple (via Reuters). Apple was ordered to pay the unpaid taxes in August 2016 after the Commission ruled that the company had received illegal state aid.

The Commission argued that Irish revenue commissioners gave Apple unfair advantage between 1991 and 2007 by allowing the company to move income from the European market through two "non-resident" head office subsidiaries based in Ireland. Ireland vowed to appeal the ruling.
“More than one year after the Commission adopted this decision, Ireland has still not recovered the money,” EU Competition Commissioner Margrethe Vestager said, adding that Dublin had not even sought a portion of the sum.

“We of course understand that recovery in certain cases may be more complex than in others, and we are always ready to assist. But member states need to make sufficient progress to restore competition,” she added.

The Commission said the deadline for Ireland to implement its decision had been Jan. 3 this year and that, until the aid was recovered, the company continued to benefit from an illegal advantage.
Ireland's finance ministry said it had never accepted the Commission's analysis in the Apple state aid decision, but would collect the money due pending Dublin's own appeal of the ruling.

"It is extremely regrettable that the Commission has taken this action, especially in relation to a case with such a large scale recovery amount," the ministry said in a statement.

Apple claimed earlier this year that the Commission made "fundamental errors" when it ruled that the company owed Ireland the unpaid taxes plus interest, and argued that the profits to those activities were attributable to the United States.

Apple CEO Tim Cook has called the EC's ruling "total political crap" and described the lower end 0.005 percent tax rate Apple is accused of paying as a "false number". The Apple CEO has previously said he believes the decision will be reversed.

In addition, Vestager announced a demand for Amazon to pay around 250 million euros in taxes to Luxembourg. Amazon denied it owed any back tax, and claimed it had not received any "special treatment" from Luxembourg.

"We will study the Commission's ruling and consider our legal options, including an appeal," an Amazon spokesperson said.

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.


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