Ireland has chosen the Bank of New York Mellon to administer an escrow fund of up to 15 billion euros (about $18.6 billion) in disputed taxes that the European Commission (EU) ordered the government to collect from Apple, reports Reuters.
The EU, Europe’s anti-trust and consumer investigation agency, claims 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.
The result: the 15 billion euro fine. Both Apple and Dublin are appealing the original ruling, saying the iPhone maker’s tax treatment was in line with Irish and European Union law. 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.