back to article Escrow you, Apple! Ireland expects Cupertino to cough up to €13bn

Apple has agreed to start paying the Irish government up to €13bn (£11.4bn) next year. A spokeswoman from Ireland's Department of Finance confirmed an agreement had been reached with Apple in relation to the framework of the principles that will govern the escrow arrangement, whereby it will deposit money with a third person …

  1. LeahroyNake
    WTF?

    What a mistake to make

    In October, the commission referred Ireland to court over its failure to collect the tax from Ireland.

    It's complicated enough :)

    1. Anonymous Coward
      Anonymous Coward

      Changed rules ... so the tax may hurt less

      If I am not mistaken, the Irish changed their write-off rules, so the tax bill can be written off against future investments for some decade(s). Can't find the story anymore, but it might explain the sudden change of heart.

    2. Anonymous Coward
      Anonymous Coward

      Re: What a mistake to make

      So traditional Irish 7 course meals all round then!

      (6 pints and a potato).

  2. Richard Gray 1
    Pint

    Tax refund

    So does that mean that everyone in Eire will receive a share of that? by my calculations its about 2,708,333,333 euro per person...

    Can I move to Eire now??

    (No Guinness icon, so this will have to do...)

    1. Anonymous Coward
      Anonymous Coward

      Re: Tax refund

      Hah. I'd be surprised if Brussels hasn't already planned how it's going to spend its new money.

      I'd also be surprised if Apple hasn't already decided to which new tax haven it will be moving its Ireland operation.

      1. Anonymous Coward
        Anonymous Coward

        Re: Tax refund

        "I'd also be surprised if Apple hasn't already decided to which new tax haven it will be moving its Ireland operation.'d also be surprised if Apple hasn't already decided to which new tax haven it will be moving its Ireland operation." They have, Jersey I think.

        1. katrinab Silver badge

          Re: Tax refund

          It's not as simple as that.

          It needs to be somewhere that they can pay money to without deducting witholding tax. Any country in the EU meets that requirement, for other countries, it tends to only be the case if they charge proper tax rates on the money when it arrives.

    2. Fortycoats

      Re: Tax refund

      Fat chance. They won't even use it to plug the gaping holes in the national pension reserve fund. It's all going to pay off a fraction of the Anglo-Irish Bank debt. So some senior bank managers in Paris, Frankfurt and whoever else lent Anglo the money can get even bigger bonuses.

      Well, some might be used to finance the next well-earned pay rise for the glorious elected representatives of Dáil Éireann (apologies if anyone's sarcasm detector just exploded)

      1. Anonymous Coward
        Anonymous Coward

        Re: Tax refund

        "glorious elected representatives"

        Interesting you should say that. Visited Dublin recently, very nice city, enjoyed it, despite 5.60 for a pint of Guinness. However, I'm used to people wherever I go, talking down their politicians. Don't recall ever hearing it as bad as in Ireland. And that's in the context of me being from the UK and suffering under the current May based clusterfuck....

    3. Nik 2

      Re: Tax refund

      I think that one of your commas should be a decimal point.

      Still, it's enough to give everyone in the country an IPhone X and an IWatch.

      Attn El Reg Standards Unit: Can the sum of £11.4Bn please now be officially known as an iRefund?

    4. Anonymous Coward
      Anonymous Coward

      Re: Tax refund

      It's Ireland not Éire unless you're writing in Irish.

      /pedantic mode off

      1. aks

        Re: Tax refund

        To out-pedant you, the name of the country is Éire unless you're writing in English.

        But do realise that both names refer to all 32 counties of the island of Ireland. The six in the north-east are called Northern Ireland and the remaining 26 are the republic of Ireland. Capitalised Republic is used by the UK but other countries are "persuaded" to use the fiction that the island is one country, in a similar way that Taiwan is a province of China.

        1. Mage Silver badge

          Re: the remaining 26 are the republic of Ireland.

          No, Ireland can mean either the entire island or the 26 counties. "Republic of Ireland" isn't official.

          It's not the same as Taiwan.

          Nor does Ireland the Country have a claim over the six counties since the Good Friday Agreement. It now can only be decided by referendum in N.I.

          It's only Éire in Irish.

          1. aks

            Re: the remaining 26 are the republic of Ireland.

            Wikipedia disagrees with you, as do I. https://en.wikipedia.org/wiki/Ireland

            The 1937 constitution laid claim to the whole island of Ireland. The Good Friday Agreement was the acceptance by Dublin that the people of the 6 were entitled to choose whether to be separate or to unite with the 26. Since the Agreement, institutions and trade within the 32 have increased markedly and the border had become almost invisible until the Brexit referendum.

            Ireland is the name of the island in English. In Scots Gaelic it's Èirinn, In French it's Irlande, in Welsh it's Iwerddon, in Latin it's Hibernia.

            Both Beijing and Taiwan agree that Taiwan is a province of China. They simply disagree about who's the legitimate government of the entire country. That's a difference between the status of Taiwan and the status of Northern Ireland.

            Calling the 26 counties Éire is simply a shorthand when distinguishing the 26 from the 32. Mostly used by non-republicans in Northern Ireland.

            1. Paul Crawford Silver badge

              Re: the remaining 26 are the republic of Ireland.

              A useful short video on the issue of Great Britain:

              https://www.youtube.com/watch?v=rNu8XDBSn10

            2. Malcolm Weir Silver badge

              Re: the remaining 26 are the republic of Ireland.

              Gosh. So you expect me to take your word and that of Wikipedia (edited by any rando)?

              Thanks, but I think I'll take the word of the government of the country in question: http://www.irishstatutebook.ie/eli/constitution-en.html

              You'll note that Éire is used in the Constitution in ENGLISH. Which makes you pretty unambiguously wrong.

              So, no, calling the 26 counties Éire is simply, err, correct per the Constitution of Ireland. It is entirely irrelevant whether those 26 counties would want to be 32 counties, because until they do, the Constitution of Ireland doesn't apply to those remaining 6 counties (even though you claim it would like to), and only complete idiot would argue otherwise.

              Of course, you are correct-ish in that the name of the island being Ireland. That's the geographic usage I mentioned. (It's actually more than an island, so to actually correct you should have written something like "land mass" to include the various separate islands off the cost of the main one).

              Where you fall down is that the geographic entity (which you so helpfully provided in Latin, too) is not the same as the political one.

              So to make it simple for you:

              Ireland is a geographic land mass west of England and north of France. Geographically unambiguous.

              Ireland *may be* used as the name of the state occupying the majority of the land mass, subdivided into 26 counties.

              Ireland *may be* in a social sense used as a place of origin. However, when used in a formal setting, it is unacceptably ambiguous (if something is labelled as being a product of Ireland, that would be true whichever county or counties it came from, which is unhelpful in determining the country of origin).

              Éire is unambigously the name used to refer to the state consisting of the parts of the land mass subject to the Constitution of Ireland.

              If you'd like to argue more, I suggest you start with changing the Constitution. Once you've achieved that, please come on back!

              1. Anonymous Coward
                Anonymous Coward

                Re: the remaining 26 are the republic of Ireland.

                and there, in a nutshell, we have why the place causes so many damned problems. Arguing over a name.

                1. Slx

                  Re: the remaining 26 are the republic of Ireland.

                  Ireland = Ireland in English and Éire in Irish.

                  There's nothing any more complicated than any other country.

                  I say this as someone who lives in Ireland. I think some people are getting a bit too pedantic and looking to find offence when the country is referred to as Éire in in English in Britian. If is one of its official names.

                  Meanwhile, the UK is the United Kingdom of Great Britian and Northern Ireland.

                  The adjective used to describe its citizens is somehow "British" rather than UK citizens, even though that would seem to imply someone from the island of Britain.

                  All of its component nations are referred to as countries, even though they're comparable to states in a federation. It has some of the structures of a federation, but somehow it isn't really one. It's more like England and some other former countries that are still referred to as countries for historical reasons. Sorry Scotland, but unless you declare independence, you're still only a sub national entity that is referred to as a country for legacy reasons.

                  Then in sport they all play separately, and sometimes Northern Ireland plays with Ireland as Ireland in rugby for example.

                  Then you've Team GB which would imply the team that represents the island of Great Britian, yet it is actually the UK Olympic team.

                  Then you've the utterly unfathomable level of complication in terms of how the UK somehow controls a whole series of small islands (including several right next to it) as crown dependencies. These seem to basically function as a money laundering and tax haven system.

                  Yet somehow Ireland's confusing and complicated ?!?

                  1. Malcolm Weir Silver badge
                    Joke

                    Re: the remaining 26 are the republic of Ireland.

                    SLx...

                    Of course Ireland is confusing and complicated... about the least confusing and complicated bit, though, is the name!

                    I did enjoy this weekend's snowball effect: if Northern Ireland could be part of the EU trade area, then why not also Scotland and London!

                    Meanwhile, thank goodness there's no dispute about what "Europe" means.... 8-)

                    1. Paul IT

                      Re: the remaining 26 are the republic of Ireland.

                      Amusing YouTube video about The European Union Explained

                      https://www.youtube.com/watch?v=O37yJBFRrfg

      2. Malcolm Weir Silver badge

        Re: Tax refund

        Nope.

        Article Four of the Constitution of Ireland reads:

        The name of the State is Éire, or, in the English language, Ireland.

        Or, if you prefer:

        Éire is ainm don Stát nó, sa Sacs-Bhéarla, Ireland.

        Meanwhile, in the preamble of that document, it says "We, the people of Éire..." with no mention of "Ireland" even in the English version.

        Therefore, I read that qualifying "in the English language" as permissive, not prescriptive, because they themselves don't use "Ireland" in the English language preamble to the Constitution.

        However, that's the Constitution of the Nation of Ireland, so obviously "Nation of Ireland" is a thing.

        So it seems to me that Éire is correct and unambiguous (but note the accent), the "republic of Ireland" (lower case "r") , and "the Irish state" is fine and unambiguous (being descriptive, not a proper name) *and* (based on Article 4) "the Irish State" is OK, too (as they capitalize State)... which means that the Irish Republic and Republic of Ireland would also be OK (if you can capitalize State, why not Republic?).

        Finally, "Ireland" is also correct per the Constitution, but ambiguous because the word refers to both a geographic and political entity (like "America"). So people writing in English may choose to use the unambiguous proper name (" Éire"), and even though the Constitution permits the use of "Ireland" in English to refer to the Nation of Ireland it is not binding on non-Irish people.

        All that permissive clause in Article Four really does is ensure that if you are an Irish citizen writing in, say, Hindi, you may NOT use "Ireland" to refer to the name of the state.

  3. Mike Shepherd
    Meh

    "The Register has contacted Apple for a statement"

    Good luck with that.

    1. Anonymous Coward
      Anonymous Coward

      Re: "The Register has contacted Apple for a statement"

      Just visit any online business bullshit generator, management phrase generator, or other similar functioning site. Have it generate a pseudo random pile of bullshit. The output will probably sound suspiciously like anything Apple may eventually say, and it will be about the same value - namely none.

    2. Doctor Syntax Silver badge

      Re: "The Register has contacted Apple for a statement"

      Things are improving. They didn't reach out.

  4. alain williams Silver badge

    Clever Irish

    advertise a low tax rate for the mega corps, have them all flock there and create lots of jobs.

    Then ''the nasty EU says we have to charge you the tax that we told you were going to avoid".

    So: they have lots of jobs and €13 billion.

    Although I do wonder what will happen in the next couple of years -- but they can always blame the mega corps going elsewhere on Brexit.

    1. Anonymous Coward
      Anonymous Coward

      Re: Clever Irish

      " ... they can always blame the mega corps going elsewhere on Brexit"

      Err, you do realise the Ireland isn't leaving the EU. If you think it's part of the UK I'm sure any Irish commentards can explain why it isn't.

      1. wolfetone Silver badge

        Re: Clever Irish

        "Err, you do realise the Ireland isn't leaving the EU. If you think it's part of the UK I'm sure any Irish commentards can explain why it isn't."

        I would, but I'll wait until he finds out Rhodesia isn't a thing anymore first.

      2. alain williams Silver badge

        Re: Clever Irish

        Err, you do realise the Ireland isn't leaving the EU. If you think it's part of the UK I'm sure any Irish commentards can explain why it isn't.

        I'm well aware of that. Brexit could result in many businesses moving to Eire, it could also result in a downturn in trade with the UK due to tariffs at the border. Who knows!

    2. Doctor Syntax Silver badge

      Re: Clever Irish

      but they can always blame count on the mega corps going elsewhere to Ireland on Brexit.

      FTFY

      1. TheVogon

        Re: Clever Irish

        "but they can always blame count on the mega corps going elsewhere to Ireland on Brexit."

        I think you mean coming to the UK. We will be able to offer tax deals without breaking any EU rules!

    3. Mage Silver badge

      Re: Clever Irish

      Problem was Apple paid less than 0.5% and Irish Corporate rate is now 12.5% (lowest and EU agreed).

      There are two rates of corporation tax in the Republic of Ireland:

      1) 12.5% for trading income

      2) 25% for non-trading income

      A special rate of 10% for companies involved in manufacturing, the International Financial Services Centre (IFSC) or the Shannon Free Zone ended on 31 December 2003, FOURTEEN Years ago.

      Biggest tax haven & Money laundering country in the world is UK. See how many overseas territories and crown dependencies are UK and Tax havens. Also money laundering in them and City of London.

      EU wishes to stop all this. Is that the REAL reason why Tories want Brexit and no ECJ? Look at Gove's Chlorine Chicken / Meat Growth Hormone / GM food support and his corporate interests.

  5. Anonymous Coward
    Boffin

    A debt's a debt!

    Good. £9B of that they can use to repay the loans Britain made to the Republic of Ireland the last time their economy collapsed.

    1. Roland6 Silver badge

      Re: A debt's a debt!

      I think you will find those loans were in Sterling, not Euros. So Ireland only has to wait a little and suddenly that 9B GBP becomes 9M Euros... :)

      1. TheVogon

        Re: A debt's a debt!

        "So Ireland only has to wait a little and suddenly that 9B GBP becomes 9M Euros... "

        Let's hope so - it would be great for exports. And for the FTSE.

    2. Cian Duffy

      Re: A debt's a debt!

      Those loans would have been repaid quite some time ago if the UK allowed - they are the most expensive credit the Irish state has and they could refinance them for possibly a quarter of the price. Was a rather profitable little exercise for the UK Treasury.

      1. Mark 65

        Re: A debt's a debt!

        ...and a lesson in why you should run your economy a little better. Still, they may soon get the opportunity to make a profitable loan the other way.

  6. Bill M

    My Uncle can vouch for me

    I have an escrow service that would be perfect. My Uncle can vouch for me and my escrow service - he is impeccable and has often used my services for his dealings with Nigerian funds.

    1. Anonymous Coward
      Anonymous Coward

      Re: My Uncle can vouch for me

      I'm sorry, his credit is only good for $34 million (thirty four million dollars). According to this file I have from Equifax, anyway.

      1. Bill M

        Re: My Uncle can vouch for me

        Thx for the info - All sorted at Equifax and credit now at $340 billion.

  7. aks

    The comments seem to imagine that Apple have agreed to pay. They've put their spare change into an escrow account so that the money is earmarked for payment once all legal processes have completed.

    The purpose is clearly so that Apple can bid for business within the EU by saying the money is allocated and real life should go on.

    I predict that this will go to international arbitration eventually.

    1. I ain't Spartacus Gold badge

      I don't see how it can go to international arbitration. I'm not even sure Apple have standing to appeal themselves, given that the Commission ruling was against Ireland's government, and not Apple. So Apple and ROI seem to have got together to appeal to the ECJ (European Court of Justice) more-or-less together, but this is basically the Irish government fighting the Commission.

      Once that's happened, Apple may then be able to sue the Irish government in their courts, and may then be able to appeal that up to the ECJ themselves, for the way the Irish have interpreted their own tax laws and applied them to Apple, but the current appeal is the Irish government fighting the EU on whether Irish tax law complied with European competition law.

      Apple are allowed to offset any corporation tax they pay on overseas earnings against US corporation tax due on them, if and when they finally re-patriate that money to pay tax on it. Something they haven't done in more than a decade, instead choosing to borrow money in order to pay dividends on foreign profits, so as to avoid paying US corp tax.

      Assuming Trump and Congress agree to a change in US corporation tax, that may happen relatively soon. So the US will lose out. But 12.5% on EU earnings isn't an unreasonable charge, and the US agreed to those mutual tax agreements - so it's a bit bloody late to complain now. Even though Trump has. He could threaten to ditch the tax agreements of course, but that doesn't change the past.

      1. Roland6 Silver badge

        Apple are allowed to offset any corporation tax they pay on overseas earnings against US corporation tax due on them, if and when they finally re-patriate that money to pay tax on it.

        You are forgetting that a few years back Apple took out loans in the US to pay dividends, the loans get repaid by repatriating monies from overseas, with no US tax being paid regardless of whether or not overseas taxes have been paid on the earnings.

  8. Pascal Monett Silver badge
    WTF?

    What ?!?

    Haven't we been repeatedly told that Ireland did not give Apple any special treatment ?

    So how come all of a sudden Apple agrees to pay BILLIONS ????

    I'm really sorry, but if I were at the top of a multi-national company (and therefor had no conscience) and I was told I had to pay billions of dollars or face fines in the millions, well I'd choose the millions. What happened that convinced Cupertino to pay billions ? What could possibly be worse than that ?

    Is Ireland going to expel Apple ?

    My mind is boggled.

    1. I ain't Spartacus Gold badge

      Re: What ?!?

      Apple don't get fined millions, they get shut down in Ireland, or their Irish management put in prison for fraud if they don't pay their taxes.

      The people getting threatened with fines are the Irish government. They're in dispute with the European Commission competition commissioner over their tax law, and have been ruled against. So this escrow deal is to put the money into safekeeping until the appeal to the European Court of Justice goes through. They're unwillingly being forced to change their tax laws on grounds that they break EU competition law - hence the dispute and appeal.

      I presume the Irish government are trying to find the least painful way to make Apple pay up, while they appeal - given it's an important part of their economy to attract European HQs their and they see this ruling (or claim to anyway) as an indirect attack on them by the French and German governments, who've been trying to get them to put their corporation tax rate up for years.

    2. anothercynic Silver badge

      Re: What ?!?

      It's not giving Apple special treatment. What *is* happening is that Ireland and Apple are putting the dosh (of said ruling) in escrow until the ECJ case is resolved. Ireland wants this resolved as much as Apple does, and no doubt at some point there will be a resolution of some sort, where Apple possibly pays a big wad but less than €13 billion, and that all going into Ireland's coffers...

  9. Robert Sneddon

    Fines AND back payments

    Any fines that might be levied are on top of the requirement to repay the taxes owed as well if the case goes against them.

    Apple may well try and find another low-tax EU country to shuffle all their EU earnings through but Ireland is already one of the lowest corporate tax environments in the EU. The beef is that they weren't charging Apple the same rate of tax as everyone else and now they have to do so, and claim the back taxes too.

  10. Anonymous Coward
    Anonymous Coward

    "The Register has contacted Apple for a statement."

    Hope springs eternal, eh?

  11. Anonymous Coward
    Anonymous Coward

    In escrow

    Aaaah come on now Ted.

    So, the funds really ARE resting in the account.

    - Dougal

  12. GcdJ

    You do not understand - Eire have underwritten the fine

    As part of the "attractive tax" agreement that was formed to get Apple into Ireland Apple asked Ireland to confirm via a formal legal opinion that the tax agreement proposed by Ireland was legal. Ireland provided that legal opinion and assured that should the opinion be incorrect that Ireland would cover the costs of ant litigation or fines. It has been featured in documentaries on the topic.

    This is why Apple is not that bothered by the fine except for the reputational damage - Putting the money in Escrow provides a bit of a cash-flow challenge but nothing major for Apple.

    If/When apple is required to pay the money to the Irish Government the Irish government will simply pay it back. This proposal for offsets is simply a way to improve the optics.

    Also - The BBC Panorama programme on the Paradise Papers (recent data hack from wealth managers) showed that Apple had gone "tax avoidance" shopping after it's problems in Ireland. The programme featured the invitation to tender that was sent to all the zero tax centres around the world.

    But none of this stop people buying the phones.......

  13. TrumpSlurp the Troll
    Trollface

    Not mentioned so far

    Perhaps this could fund a technology demonstrator through building a border wall.

    Full project to be rolled out in the USA/Mexico leveraging the world wide reputation of the Irish for building major infrastructure including canals and railways.

  14. Slx

    The reason for the delay was the Irish Government and Apple spending months putting legal and financial structures in place to allow the money to be invested in a mutually agreed way and in such a way that the Irish Government isn't left holding the can, should the value of the investment fall.

    They spent several months basically crossing all the t's and dotting all the i's.

    The issue is that they Irish Revenue Commissioners aren't simply collecting this as tax. They have to set up a special purpose system to hold it. You can't just put that kind of money into a deposit account.

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