Ireland’s finance chief announced on Monday that the government will begin collecting €13 million owed from Apple (NASDAQ: AAPL) in back taxes.
The EU ordered Dublin to collect the owed taxes back in 2016, which the US tech giant avoided paying through lucrative tax deals from Ireland.
“We have now reached agreement with Apple in relation to the principles and operation of the escrow fund,” said Paschal Donohoe, the finance minister.
“We expect the money will begin to be transmitted into the account from Apple across the first quarter of next year.”
The EU said Apple was required to pay Ireland the taxes owed. The tax deals used are considered illegal under EU laws as it allowed the tech firm to pay a considerable amount less in taxes than other businesses.
The ruling came following a two-year investigation, where the EU concluded that tax arrangements between Apple and Ireland were illegal. At one point, the company was paying just 0.005 percent in taxes.
Amazon (NASDAQ: AMZN), Facebook (NASDAQ: FB) and Google (NASDAQ: GOOGL) have also come under scrutiny in recent years and accused of paying too little tax.
Last month, the European Commission launched a public consultation in order to come up with a fairer and “growth-friendly” tax regime for large companies operating in the European Union.
“The current tax framework does not fit with modern realities. It was designed in a pre-computer age and cannot capture activities which are increasingly based on intangible assets and data,” they said last month.
Ireland’s low tax deals to large companies has been a key role in the country’s economic success. The state is concerned by collecting the taxe owed, they will be a less attractive location for large companies.
Countries in the EU lose between €50 billion and €70 billion every year due to tax avoidance. The EU is hoping crack down on these numbers.