It’s over. The wait is finally over. Apple have completed the necessary steps to transfer the €13.1 billion they owed Ireland in unpaid taxes, as well as an additional €1.2 billion in EU interest.
Finance Minister, Paschal Donohoe, confirmed today that the full amount owed by Apple, as decreed by the European Courts, had been transferred into an Escrow Fund. The sum, which amounted to €14.3 billion in total, had been paid over the second and third financial quarters of the year, with the final payment being made in early September.
An escrow fund for those of you not in the know – a party to which I was firmly a member until a recent half-interested skim over a comprehensively informative Wikipedia page – is essentially an account set up and brokered by a third party to mediate payments between the two primary parties involved in a transaction.
As part of the announcement that the full amount had been transferred into such a fund, Minister Donohoe confirmed that the government was continuing its opposition to the ruling of the EU Courts that Apple ought to have paid the ‘alleged State Aid’ and were appealing the decision. It was confirmed that the money would be held in the Escrow Fund pending the results of the appeal against the EU Courts’ decision for the money to be paid to the Irish state.
Minister Donohoe stated;
While the Government fundamentally disagrees with the Commission’s analysis in the Apple State Aid decision and is seeking an annulment of that decision in the European Courts, as committed members of the European Union, we have always confirmed that we would recover the alleged State Aid. We have demonstrated this with the recovery of the alleged State Aid which will be held in the Escrow Fund pending the outcome of the appeal process before the European Courts.
While the reasons for the government to seek to turn down a payment of €14.3 billion are complex, chief among them is a fear that such a ruling will dissuade other large multinationals from establishing themselves in Ireland – or prompt those that are here to consider leaving. Ireland has long proven itself to be a preferred location for the headquarters of large multinational corporations due to its low corporate tax rate. Despite being officially set at 12.5%, many large corporations are able to easily circumvent this and end up in effect paying far less than this already – in terms of international standards – low level. This macro-economic argument, and the prioritisation of the interests of corporations above the desire attaining funds for public expenditure, while having a theoretical reasoning behind it, is a particularly galling and difficult pill to swallow at a time when there is such economic imbalance in Irish society, manifested most evidently in the escalating housing crisis.
A lack of funds is often one of the main stumbling blocks given as an excuse for the dirth of social and subsidised housing being built nationally. I’m no economist, nor am I an expert in construction costs and practices, but I imagine €14.3 billion – or even a portion of it – would probably build a few semi-ds at the very least.
All things considered it is a colossal amount of money, which would represent a significant addition of funds to the €72.5 billion the government has earmarked for public expenditure through 2018.
With €14.3 billion being such an unimaginably vast amount of money I have thought long and hard about the best way of representing the scale of what we’re talking about here. And, after much deliberation I have arrived at what I feel is the best way of expressing the near inexpressible.
If we are to take a Freddo chocolate bar as measuring roughly 8cm in length and 5cm in width then we can take the area of one bar to be 40cm2, or .004m2. If we are then to imagine that we spend the entirety of the €14.3 billion on Freddo bars, this would, at the current retail price of 40c, buy us some 35.75 billion Freddos – I apologise if the thought of this many chocolate bars in one place is triggering for any readers with diabetes. If we were to lay all these flat out, we are talking of an area of around 143km2 absolutely covered in Freddos. To give you some perspective on how large an area that is, it would cover 17.3% of Louth in Freddos. Though frankly I’d be hard pressed to find a good reason for doing this.
I hope that puts things in perspective.
The full announcement can be read here.