The EU is taking Ireland to court

The EU is taking Ireland to court for failing to collect €13 billion

Europe’s competition chief Margrethe Vestager

The EU is taking Ireland to court for failing to collect €13 billion (£11 billion; $15 billion) from Apple in back taxes. Ireland doesn’t actually want Apple to pay the money since it might discourage other multinationals from setting up shop there.

The European Commission, the EU’s competition watchdog, is taking Ireland to court for failing to collect billions of euros from Apple in back taxes that were deemed to be illegal state aid.

Europe’s competition chief Margrethe Vestager ordered Ireland to claw back up to €13 billion (£11.1 billion; $14.5 billion) in back taxes from Apple last August, saying that it must be recovered by January 3.

Vestager said on Wednesday that none of the money has been paid and that she has decided to refer Ireland to the EU Court as a result.

“Ireland has to recover up to 13 billion euros in illegal State aid from Apple. However, more than one year after the Commission adopted this decision, Ireland has still not recovered the money, also not in part,” said Vestager in a statement.

She added: “We, of course, understand that recovery in certain cases may be more complex than in others, and we are always ready to assist. But the Member States need to make sufficient progress to restore competition. That is why we have today decided to refer Ireland to the EU Court for failing to implement our decision.”

Ireland has made progress on the calculation of the exact amount of the illegal aid granted to Apple, the EC said, but it is only planning to conclude this work by March 2018 at the earliest.

Ireland calls the decision “extremely disappointing”
Ireland’s government said it was “extremely disappointing” that the Commission has decided to refer the case to court. The Department of Finance said in a statement on its website:

“Ireland has never accepted the Commission’s analysis in the Apple State Aid Decision.
“However, 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 ensure this is achieved.  Ireland fully respects the rule of law in the European Union.
“That is why it is extremely disappointing that the Commission has taken action at this time against Ireland.
“Irish officials and experts have been engaged in intensive work to ensure that the State complies with all its recovery obligations as soon as possible, and have been in constant contact with the European Commission and Apple on all aspects of this process for over a year.
“It is extremely regrettable that the Commission has taken this action, especially in relation to a case with such a large scale recovery amount.  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 the European Union law.
“The work on the establishment of the escrow fund to deal with the unprecedented recovery amount will continue, notwithstanding the fact that Commission has taken this wholly unnecessary step.”
Paying a government €13 billion isn’t easy
Vestager described the payback process as “complicated” in an interview with CNBC in January.

“It’s a tricky thing to do because it’s a large sum so of course, you have to figure out how to do that. It’s not as an escrow account in some of the other cases where it might be €25 or €30 million…and therefore I do respect that it’s a complicated matter and it may take a little more time.”

Apple was due to pay all the money into an escrow account, which is held by a third party, by January 3.

The issue is complicated by the fact that Ireland doesn’t actually want Apple to pay the money since it might discourage other multinationals from setting up shop there. Ireland and Apple have separate appeals pending against the European Commission’s findings.

The issue has also divided opinion between Ireland, with opposition MPs suggesting the government should use the windfall to repair the country’s economy.

Apple isn’t the only US tech giant being ordered to pay more taxes
On Wednesday, Vestager also ordered Amazon to pay €250 million in back taxes to Luxembourg.

“I hope that both decisions are seen as a message that companies must pay their fair shares of taxes as the huge majority of companies do,” said Vestager in a press conference on Wednesday. “Our work is by no means done.”

Source: 10 things in tech you need to know today,

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