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Ireland to be hit by court action over Apple tax shortfall

Ireland to be hit by court action over Apple tax shortfall

The EU is taking Ireland to court for failing to recover up to US$15.3 billion of tax due from Apple

The European Commission is set to take Ireland to the European Court of Justice for its failure to recover up to 13 billion euros (US$15.3 billion) of tax due from Apple, a move labeled as "regrettable" by Dublin.

The Commission ordered the US tech giant in August 2016 to pay the unpaid taxes as it ruled the firm had received illegal state aid, one of a number of deals the EU has targeted between multinationals and usually smaller EU states.

"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 3 January this year and that, until the aid was recovered, the company continued to benefit from an illegal advantage. Apple is appealing the case.

Vestager, who was also announcing a demand for Amazon to pay about 250 million euros in taxes to Luxembourg, declined to comment on possible penalties on Ireland if it were not to comply with an eventual ECJ ruling against it.

Ireland's finance ministry said it had never accepted the Commission's analysis in the Apple state aid decision, but was committed to collecting the money due pending Dublin's own appeal of the ruling.

Ireland, it said, had been in constant contact with the Commission and Apple for more than a year and was close to setting up an escrow account. This would include the hiring of at least one investment manager to handle the fund.

"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.

Ireland's Finance Minister Paschal Donohoe said that in addition to work on the escrow account, the government was in "commercially sensitive" talks with Apple about the exact terms of the transfer.

"I believe we will get a good outcome at the end of it," Donohoe told state broadcaster RTE.

Vestager told a news conference that in other cases of illegal tax advantages, such as Fiat in Luxembourg, Starbucks in the Netherlands and a Belgian scheme for 35 companies, the money was recovered even before appeals were exhausted. However, the amounts involved were far smaller.

The Commission said that Ireland had made progress on calculating the exact amount due, but was only planning to conclude the work by March 2018 at the earliest.

Ireland, like the Benelux countries, faces criticism from bigger EU states that they are siphoning off tax revenues and the bloc's governments are negotiating reforms.

French President Emmanuel Macron applauded the latest efforts of the European Commission in a tweet on Friday.

"Bravo to Europe for acting with determination to get tax rules and justice respected," Macron said.

(Reporting by Philip Blenkinsop in Brussels, Conor Humphries in Dublin; Editing by Alastair Macdonald and Andrew Heavens)


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