Accounting
Ireland to decide how to use Apple’s €13B it didn’t want
Ireland just landed a challenge most countries would envy: how to spend an almost €13.8 billion ($15.2 billion) windfall that Apple Inc. was ordered to pay in taxes by the European Union’s top court.
Ironically, the Irish government has always maintained that it didn’t think Apple owed these taxes. But the EU’s Court of Justice Tuesday
The money involved has been sitting in escrow since an initial EU court ruling in 2016, and the bloc’s competition chief, Margrethe Vestager, said in a news conference that the taxes “must be released to the Irish state.”
Simon Wohlfahrt/Bloomberg
The Irish finance ministry said in a statement that it “respects the findings” even as it continued to insist that “Ireland does not give preferential tax treatment to any companies or taxpayers.” It added that the process of transferring the assets from the escrow fund will now commence.
“It is a complex process which is expected to take a number of months to conclude,” Irish Finance Minister Jack Chambers told reporters Tuesday afternoon. “It is a one-off payment and we will have discussions with party leaders on what next steps will be.”
The funds have been accruing interest since it was paid by Apple into an escrow account. The Irish government said in July the total value of the fund stands at €13.8 billion, after generating €400 million in 2023. The total represents about 15% of the upcoming government budget.
The sudden cash bonanza comes as Irish politicians are expecting the government to call an election in the coming months, adding an extra charge to the debate on how to use it.
Opposition parties are already calling for a parliamentary debate on how to use the money, with criticism that the government had defended corporate interests, and not the public’s.
“Everybody’s going to be demanding everything, and it’s going to be very hard for the government to say no when they want to basically get back into power,” said Aidan Regan, an associate professor at the School of Politics and International Relations at the University College Dublin.
The country faces a housing crisis and a record number of people are homeless with a lack of supply and house prices out of reach of most. Ivana Bacik, the leader of the Labour Party, said in a post on X that the proceeds of the case could “be used to underpin a dedicated long-term housing fund.”
However, the spending in the budget for 2025, which will be announced Oct. 1 has already been decided, said Chambers. “This will not impact on the parameters already set out for Budget 2025,” he told reporters.
Rare surplus
Dublin is in the enviable position of having one of Europe’s rare budget surpluses, thanks to the presence of all those multinational companies. In September, the government reported a significant increase in corporation tax receipts, and officials are working to set up a sovereign wealth fund that the finance ministry estimates could eventually reach €100 billion.
Even with such healthy public finances, €13.8 billion is still a “huge amount of money for a small country,” said Regan.
There were concerns in Dublin that the case — and subsequent appeal — would create uncertainty around tax affairs in Ireland, where low rates had long been a draw. The country has remained an attractive hub for the tech and pharmaceutical industries, with many of the world’s largest companies, including Meta Platforms Inc, Alphabet Inc. and Pfizer Inc., maintaining large physical presences.
Apple was one of the first tech giants to set up in Ireland, as a result of its deliberately low corporate tax rate in the 1980s and early 1990s to attract foreign investment. The company set up its European headquarters outside the southern city of Cork in 1980, and now employs around 6,000 in Ireland.
The Governmental Accounting Standards Board issued guidance today that will require separate disclosures for certain types of capital assets for the purposes of note disclosures.
GASB Statement No. 104,
The statement requires certain types of assets to be disclosed separately in the note disclosures about capital assets. The intent is to allow users to make better informed decisions and to evaluate accountability. The requirements are effective for fiscal years beginning after June 15, 2025, and all reporting periods thereafter, though earlier application is encouraged.
The guidance requires separate disclosures for four types of capital assets:
- Lease assets reported under Statement 87, by major class of underlying asset;
- Intangible right-to-use assets recognized by an operator under Statement 94, by major class of underlying asset;
- Subscription assets reported under Statement 96; and,
- Intangible assets other than those listed in items 1-3, by major class of asset.
Under the guidance, a capital asset is a capital asset held for sale if the government has decided to pursue the sale of the asset, and it is probable the sale will be finalized within a year of the financial statement date. A government should disclose the historical cost and accumulated depreciation of capital assets held for sale, by major class of asset.
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