Ireland's Apple escrow account declined in value by €40 million last year

The value of the fund at 31 December 2019 totalled €14.02bn which represented a decline of €249 million since the end of 2018, made up of adjustments of €209 million and a €40 million fall in value due to the current negative interest rate environment and negative yields on highly rated euro-sovereign bonds.
Ireland's Apple escrow account declined in value by €40 million last year
Both Apple and the government disagree with the Commission’s decision and has brought an appeal before the European Courts. Picture Dan Linehan
Both Apple and the government disagree with the Commission’s decision and has brought an appeal before the European Courts. Picture Dan Linehan

The €14.3bn escrow fund set up by Apple and Ireland while an appeal takes place against an EU Commission decision that the company received unfair tax incentives declined in value last year.

The value of the fund at 31 December 2019 totalled €14.02bn which represented a decline of €249 million since the end of 2018, made up of adjustments of €209 million and a €40 million fall in value due to the current negative interest rate environment and negative yields on highly rated euro-sovereign bonds.

In 2016, the EU Commission said Ireland provided Apple with unfair tax incentives and ordered Apple to pay €13 billion, plus interest. However, both Apple and the government disagree with the Commission’s decision and has brought an appeal before the European Courts.

While a decision on the appeal is awaited, Apple paid €13.4bn into an escrow account which is invested only in low-risk, highly rated euro-denominated fixed income securities, most of which currently return a negative yield.

Along with the €40 million fall in value, the fund was reduced by a further €209 million last year. The EU said the fund can be reduced if Apple was required to pay taxes in another jurisdiction in respect of the same profits for the period covered by the decision. These adjustments are referred to as “third country adjustments” and are not dependent on the outcome of the legal proceedings in the European courts.

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