The lengthy nine-year conflict involving Apple, the Irish government, and the EU reached its conclusion last year when the final appeal mandated the iPhone manufacturer to pay €13B ($15B) in back tax to the Irish government. That amount was held in an escrow account for several years, appreciating to €14.25B ($16.5B), and has now been disbursed.
### Conclusion of a Nine-Year Conflict
Apple directed the revenue from all its sales across the EU through its European headquarters located in Ireland. The company likely selected this location due to Ireland’s exceptionally low corporate tax rate compared to other EU nations, which stands at merely 12.5% – and the Irish government further enhanced the arrangement with unique agreements that allowed the iPhone maker to pay even less, with some estimates suggesting the effective rate was below 2%.
In 2016, the EU determined that these agreements were unlawful. Ultimately, it was the Irish government, rather than Apple, that was found in violation of the law. However, due to the illegality of the arrangement, Apple was deemed responsible for the taxes that should have been collected.
As both Apple and the Irish government pursued appeals, it was decided that Apple would pay the amount into an escrow account, which would be retained pending the resolution of the legal dispute.
Initially, Apple succeeded in its appeal, with judges informing the EU that it had not substantiated claims that Apple was granted an economic advantage, but the EU subsequently appealed to a higher court in September of the previous year. As anticipated, the initial appeal was reversed, and Apple was ordered to pay.
Throughout the protracted legal proceedings, an agreement was reached that Apple would deposit the funds into an escrow account. This is a bank account managed by the courts, with the funds set to be allocated to the Irish government if the EU prevailed, or returned to Apple if the opposite occurred.
The escrow funds were invested in low-risk ventures, allowing the balance to fluctuate over time. By the previous summer, the fund had diminished in value by nearly a billion dollars. However, it subsequently rebounded, increasing by a billion by the time the final amount was paid to the Irish government.
As noted by Engadget, the government announced this week that the funds have now been completely settled, and the escrow account has been closed.
> Following receipt of proceeds arising on the maturity of securities transferred to the Account, and after all fees and operational expenses were settled, the balance of the Fund held in the Account was transferred to the Exchequer on the direction of the Minister by means of several cash transfers, with the final such transfer happening on 9 May 2025 (the “Final Transfer”). The total sum of these transfers amounted to €1,567m. The Account was closed effective from 13 May 2025, with no assets left in the Account.
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*Photo by Giorgio Trovato on Unsplash*
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