Apple will help Ireland select an investment manager for the 15 billion euros ($17.9 billion) of back tax payments that will go into escrow in the country as the tech giant appeals the tax, reports Bloomberg.
The appeal could take up to five years; an Apple win would return its money. Ireland is worried about being held accountable for any depreciation that occurs while the money sits in escrow and has sought an indemnity to make sure it isn’t liable for any drop in the value of the fund while the case winds its way through the European Union courts.
The Irish debt office says that money will be “invested in low risk, fixed income securities, with the principal investment objective being to preserve capital to the extent possible in light of prevailing market conditions.”
Apple’s role in selecting the investment manager was likely a compromise to make Ireland less nervous about the situation, notes Seeking Alpha.
The European Commission, Europe’s anti-trust and consumer investigation agency, claimed that Ireland, Luxembourg and the Netherlands have attracted investment and jobs by helping big companies avoid tax in other countries, including EU members. The commission suspects Ireland was too lenient in rulings it gave to Apple and which helped the company shield tens of billions of dollars in profit from taxation. At 12.5%, Ireland’s corporate tax rate beats the U.S. rate of 35%. However, participating companies don’t pay that 12.5% under the double Irish structure.
