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THE VALUE OF the assets held in the Apple escrow account grew by €400 million in 2023, according to the latest report by the Comptroller and Auditor General (CAG).
It is the first time that a gain was recorded by the account since it was established in 2018, with the CAG attributing the increase to the higher interest rates which were present last year.
Separately, it cost €6 million to operate the escrow account last year, the authority in charge of scrutinising public accounts said. These fees were “primarily” paid to the investment managers of the account.
A lengthy legal saga between the State, Apple and the European Commission began in 2018 after Ireland contested a ruling by the EU that the technology company had to pay the back taxes, from 2016.
At the beginning of the court battle – that ended this month – the Revenue Commission set up an escrow account made up of the unpaid tax money. In total, over €14 billion is in the account.
Apple paid €13.1 billion in unpaid taxes into the fund and were also directed to pay approximately €1 billion in interest fees by Revenue, which had built up between the initial 2016 probe and the beginning of the trials.
Approximately €13.7 million of the fund is made up of assets and, as of the end of last year, 45% of those assets were in investments and the remaining 55% was being held in cash or cash equivalents, the report notes.
The growth is unlikely to impact the actual worth of the fund as its value had already significantly fell between 2018 and 2022 due to interest rates and operational costs.
Additionally, it was never the aim of the State to increase the value of the funds in the first place. The CAG report details that the strategy taken by investors was to “preserve” as much of the fund as possible.
It adds that investments were only permitted if they were determined to be of “low risk” and that the strategy has been reviewed regularly. However, the investment plan has not been changed at all since the fund was established.
The account has been managed by the National Treasury Management Authority and third-party investment management firms for over eight years.
This month the highest European Court ruled that Ireland granted “unlawful aid” to Apple and that the State was required to recover the funds.
The Government has said that the funds will not be used in the upcoming Budget, with Minister for Finance Jack Chambers outlining that Cabinet will take a “wider, strategic view” of how best to use the funds.
Last Friday, Chambers told reporters that Government will be seeking to use the money to assist the economy, strengthen competitiveness and invest in infrastructure – but stressed the need for a “proper economic assessment” first.
The Government’s “strategic direction” for the use of the funds will be announced tomorrow, alongside the Budget, the Minister added.
By the end of this year, approximately €8 billion of the fund will be extracted from the account and put into the exchequer. The remaining €6 billion will be accrued throughout next year.
However, Chambers detailed that all €14 billion from the fund will be recorded on the public’s accounts for this year for accounting purposes which have been analysed by the Central Statistics Office.
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