Dear Clients,
 

The arrangements for collecting the alleged state aid involved in the EU Apple tax investigation should be in place before the end of the year, according to a briefing by the Irish Finance Department.
 

In a briefing prepared for the new Finance Minister Paschal Donohoe, the Department noted that, notwithstanding the Government’s appeal against the EU’s ruling, Ireland is bound to recover the sums deemed to have been state aid.
 

The briefing stated that while the European Commission has estimated that this will amount to EUR13bn (USD14.98bn), the precise sum has yet to be calculated, and will be subject to interest. “The intensive calculation work has been prioritized and progressed but is not yet concluded,” it explained.
 

The Finance Department nonetheless expects the final recovery amount to be in the region of the Commission’s original estimate, and that the interest will be less than EUR2bn.
 

The money recovered will be placed into an escrow fund.
 

The briefing said: “Given the scale and bespoke nature of such a fund, the precise terms are still being developed and negotiated with Apple and the Commission – involving commercially sensitive deliberations. It is expected that the arrangements (including signed contracts) will be in place and the initial funding paid over to the fund before the end of the year.”
 

The briefing added that significant government resources have been dedicated to this case, led by the Department’s Tax and Banking divisions, and involving officials from Revenue, the National Treasury Management Agency, and the Attorney General’s Office. The Government has engaged external advisers on the escrow contracts.
 

The briefing noted that the formal deadline for recovery has now passed, but stressed that it is “not uncommon for member states to require more time for recovery” of alleged state aid. It said that the Commission “has acknowledged the complexity involved in our case but continue to send reminders about Ireland’s obligations.”
 

After a two-year state aid investigation, in 2016 the Commission concluded that two tax rulings provided by the Irish Government to Apple had “substantially and artificially lowered the tax paid by Apple in Ireland since 1991.”
 

Separate appeals against the ruling have been lodged by the Irish Government and by Apple in the General Court of the European Union, asking the court to void the whole decision.
 

The money will only be released once there has been a final determination in the European courts. The Finance Department expects this decision “to be several years hence.”
 

Kind Regards

Cardwell Advisory Desk