Ireland Taken to Court by EU for Not Claiming Tax Windfall

On Wednesday, the European Commission announced that it has taken Ireland to court. The EC said its case will be heard by the European Court of Justice over Ireland’s failure to recover the €13 billion or $15.3 billion in tax that Apple, Inc. was ordered to pay. The court action taken by the EC was called regrettable by Ireland’s government.

The EC ordered tech giant Apple to pay the taxes in August of 2016 after ruling the U.S-based company received illegal aid from Dublin, one of many deals the EU has focused on between multinational companies and usually small EU members.

Margrethe Vestager the Competition Commissioner with the EC said that over one year has passed since the Commission adopted the decision and Ireland has not recovered any money. She added that Dublin did not even seek a portion of the large sum.

The EC Commissioner added that the commission understands recovery in some cases might be more complex than for others, and the organization is always willing to assist, but states that are members of the EU must make progress to restore equal competition.

The EC said that the deadline Ireland had to implement the Commission’s decision was January 3 of this year, and because that has not been carried out, Apple continues to benefit from its illegal advantage. The case is under appeal by Apple.

Vestager, who also announced that the EC ordered Amazon to pay €250 million in taxes to Luxembourg, did not comment on what the possible penalties it would file against Ireland if the government in Dublin did not comply with an eventual ruling against it by the ECJ.

The finance ministry of Ireland said it never accepted the analysis by the Commission related to the state aid given Apple, but expressed its commitment to collecting money due pending its own appeal of that ruling.

Ireland said it has been in constant contact with Apple and the Commission for over a year and was closing in on setting up an account, which would include hiring a minimum of one investment manager who would handle that fund.

In a prepared statement, the ministry said it was highly regrettable that the EC had taken the action, especially related to a case with such a large recovery amount.

Vestager said that other cases involving illegal tax benefits such as with Fiat and Starbucks, the monies were recovered in full prior to the exhaustion of appeals.

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