The Irish government is preparing to receive an estimated $15.2 billion from Apple in unpaid taxes, Bloomberg reports. The massive sum cannot be deposited in a bank account, and will instead be held in escrow by a custodian and overseen by investment managers until legal appeals by Ireland and the iPhone maker are resolved.
“Commencement of this procurement process represents a significant milestone and follows months of intensive discussions between Ireland, Apple and the European Commission on the recovery process,” the Irish finance ministry said.
The European Union’s competition regulator ruled last year that the company had benefited from a cozy tax arrangement with Ireland which resulted in a tax rate of 0.005 percent in 2014. The European Commission argued that the benefits amounted to illegal state aid, a finding which both Ireland and Apple vehemently rejected the ruling and vowed to contest.
Apple missed the original payment deadline on January 3rd, forcing the Commission to issue the following statement of warning to Ireland: “If member states fail to meet their obligation, the commission may decide to refer them to the EU courts for failure to implement a state aid decision, in line with the EU Treaty.”
“The European Commission’s case against Ireland has never been about how much Apple pays in taxes, it’s about which government gets the money,” said an Apple spokesman. “The United States government, the Irish government and Apple all agree we’ve paid our taxes according the law. Since virtually all of our research and development takes place in the United States, according to the law, we pay the majority of our taxes in the U.S.”
Apple’s tax practices have come under increasing scrutiny in recent years. The company is currently sitting on a massive cash hoard well in excess of $200 billion that it has refused to repatriate to the US until the corporate tax rate is lowered.