Ireland’s debt agency came investing disputed taxes collected from Apple in euro-dominated fixed income securities, the agency said in an annual report.
The investments made by the National Treasury Management Agency (NTMA) were mainly in quasi-sovereign and short to medium-term sovereign bonds that are counted as low risk and high return securities.
In April 2016, the European Commission ruled out the tax incentives received by Apple from Dublin as unfair and against the EU state aid rules, with an order to Irish government of making recoveries from iPhone maker, totaling it to an amount of 14 billion euros after including interest.
Apple and Dublin appealed against the EU’s ruling describing the tax treatment as fair and were in line with the both country’s as well as EU’s law. But despite the result of appeal which is still pending and could take several years to be resoleved, Apple has yet to hand over the full amount of the back taxes.
With an aim to save capital as effectively and efficiently as possible according to the prevailing market conditions, an escrow account is used by Ireland to hold the funds, said the annual report of the agency.
Interest of the Irish taxpayer would be protected from risk of having loss while setting up the fund, said the government. Conor O’Kelly, NTMA’s Chief Executive, on Monday, said that the fund’s value was very likely to be reducing unless the interest rate increases due to changes in financial market scenarios.
Describing the current situation, O’Kelly gave an explaining example that if the current interest rate reduces by 50 basis points then it will make loss of 5 million against each billion, resultantly the value would be decreased by 70 million annually.
But at the end of the day, Irish people are safe because Ireland has agreed with Apple that the iPhone-maker will bear any losses itself in case of appeal court decides in favor of the company.
