Electronics giant Apple has paid €1.5bn into an escrow account set up by the Government to retain the €13bn in disputed taxes the company owes Ireland.
It is the first in a series of payments, with the expectation being that the remaining tranches will flow into the fund during the second and third quarters of this year.
Last month, Finance Minister Paschal Donohoe announced the payments would begin after signing a detailed legal agreement on the refund of what the EU alleges is State aid by the technology giant.
The European Commission said, in 2016, that the multinational company had received unfair tax incentives from Ireland and ordered it to pay back taxes to the State.
The commission found that Ireland had given Apple illegal State aid by allowing it to pay an effective 1% corporation tax.
Last October, the commission announced it was taking Ireland to the European Court of Justice over delays in recouping the money owed.
Apple and the Government are appealing the commission’s ruling on the grounds the tax treatment did not breach Irish or EU laws.
The money will be held in an escrow account, meaning the proceeds cannot be released until there is a final determination in the European courts over the validity of the commission’s decision.
The Bank of New York Mellon, London branch, Amundi, BlackRock Investment Management (UK) Limited, and Goldman Sachs Asset Management International have been selected as preferred tenderers for the provision of services related to the money.
In a statement, Mr Donohoe confirmed yesterday that the first payment had been made.
“This is the first of a series of payments with the expectation that the remaining tranches will flow into the fund during Q2 and Q3 of 2018 as previously outlined,” he said.
“There will be no further official comment on collection of the alleged State aid until the full recovery has been effected which is expected by the end of Q3, 2018,” the finance minister added.
Ireland’s open economy is based on using low corporate taxation among other incentives to attract multinational companies.
In Apple’s case, it was significantly below the standard 12.5% imposed on income.
The Government opposes any effort to force it to change its taxation practices, which have seen the world’s top financial and technology firms set up base in Dublin.
Speaking at the announcement of the refund deal last month, Mr Donohoe reiterated his Government’s fundamental disagreement with the commission’s Apple decision.
“However, as committed members of the European Union, Ireland is intent on complying with our binding legal obligations in this regard,” he said.
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