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Ireland to recover Apple state aid by September

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The Irish government and Apple have signed an ‘escrow framework deed’ setting up the account into which Apple will pay the estimated €13bn in tax and interest Ireland will have to recover, should the Court of Justice uphold the European Commission’s decision on illegal state aid.

The Irish government and Apple have signed an ‘escrow framework deed’ setting up the account into which Apple will pay the estimated €13bn in tax and interest Ireland will have to recover, should the Court of Justice uphold the European Commission’s decision on illegal state aid.

Irish finance minister Paschal Donohoe said he expected Apple to begin making payments in ‘significant tranches’, with the full recovery to be completed by September.

The Irish government announced in March that the London branch of Bank of New York Mellon would provide escrow and custodian services, with Amundi, BlackRock Investment Management (UK) Ltd and Goldman Sachs Asset Management International as investment managers.

The Commission decided in August 2016 that two tax rulings issued by the Irish government in favour of Apple, dating back to the 1990s, breached EU state aid rules.

‘This is the largest recovery fund of its kind ever to be established,’ the minister said, reiterating the Irish government’s position that while it ‘fundamentally disagrees with the ruling of the Commission’, Ireland continues to comply with its ‘binding legal obligations in this regard’.

Keith O’Donnell (Taxand Luxembourg) commented: ‘Whilst it appears that Apple has conceded, in reality, the money will be held in escrow and invested for Apples’s benefit whilst the company continues its battle in the courts.

‘But today’s news will be unsettling for many corporates,’ O’Donnell said. ‘The EC may have good intentions towards creating a more level playing field, but these rulings erode business and investment confidence and undermine multilateral efforts to address these issues, such as the OECD-led actions on base erosion and profit shifting.'
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