“Apple’s Italian subsidiary has agreed to pay €318m (£235m; $348m) following an investigation into tax fraud allegations, Italy’s tax office says. Italy’s tax authorities say the company failed to pay €880m in tax between 2008 and 2013, according to La Repubblica,” BBC News reports. “The settlement follows an investigation by prosecutors in Milan.”
“The US tech giant has not commented on the deal. It has previously denied attempting to escape paying tax owed on profits made around the world,” The Beeb reports. “Apple Italia is part of the company’s European operation which is headquartered in Ireland, a country with one of the lowest levels of corporation tax in the EU.”
“Apple’s European operations have been headquartered in Cork since 1980. The company is expanding its workforce there to 6,000 and it has been joined in Ireland by other US tech firms including Twitter, Microsoft and Google,” The Beeb reports. “The company’s chief executive, Tim Cook, has rejected accusations that the firm has been sidestepping US taxes by stashing cash overseas, insisting: ‘We pay every tax dollar we owe.’ Mr Cook said on a visit to Ireland in November that he was confident the Dublin government and his company would be found to have done nothing wrong.”
Read more in the full article here.
“Italian media reported earlier this year that Apple Italia “transferred” €879 million of profit earned in Italy between 2008 and 2013 to Cork-based Apple Sales International, in order to avail of Ireland’s lower corporate tax rate (12.5 per cent as opposed to 43-44 per cent),” The Irish Times reports. “Following a raid on Apple Italia’s Milan headquarters in 2013, investigators in Italy said they had documentation that proved the scheme by which Apple Italia redirected proceeds from its Italian sales to Apple Ireland was illegal. Apple Italia was reportedly listed as a ‘consultant’ for Apple Ireland, thus enabling the US colossus to transfer its Italian earnings to Ireland.”
Read more in the full article here.
MacDailyNews Take: This sets a precedent which could prompt a parade of countries to “investigate” Apple hoping for a large payment. Who’ll be be next piggy at the trough?
I’m sure the Italian government will use the proceeds wisely. (/sarcasm)
As in the U.S. and in many other places, fraud, graft, and corruption is commonplace in Italy.
A few Italian examples (source):
1) Digitaleco’s dodgy DVDs: From 1998 to 2005 a fake company known as Digitaleco received over €3 million in EU funding to produce DVDs. However, by 2005 the company plant was still missing a roof and was not connected to a waste system. Still, it had mysteriously been certified as completed by regional officials in Calabria.
Strangely, regional authorities in Calabria made no attempts to recoup the money and subsequent raids across the country implicated a former public official in Calabria, the treasurer of the Catholic UDC party and a fundraiser for Silvio Berlusoni’s Forza Italia party in the scandal…
2) A lift to nowhere: Over €2 million of EU taxpayers hard-earned cash was used to build a lift in the small Italian town of Sutera, Sicily. The lift was finished in 2012, but has never been used as the costs of running the lift were too expensive for the small town.
Now it is feared that much of the budget may have ended up lining the pockets of local mafiosi.
3) Clean electricity? Clean money! Italy’s poorer south is a prime target for EU development funds: unfortunately it is also the nerve centre of the global mafia. Between 2007 and? 2013 the EU structural fund granted €350 million to Sicily – money local mafia were looking to get a slice of.
Vito Nicastri used some of these funds to build up a huge empire of renewable energy on Sicily that was used as a front for the Mafia, which is suspected to have used green businesses to launder illegally earned money.
Nicastri had over €1.2 billion euros worth of assets seized by anti-mafia police in April 2014.
4) A3: In 2012, Italy was ordered to repay the EU a whopping €420 million after anti-fraud investigators found evidence of foul play in the way EU funds had been used to rebuild the A3 Motorway between Salerno and Reggio Calabria. The project has been dogged by repeated scandals. In May this year, Italian Premier Matteo Renzi declared that the motorway would be finished within a year. Construction began in 1966 – so watch this space!
The answer to the problem isn’t “more taxes.”
Blah, blah, blah….
The tax regime in Italy is what the Italian government says it is and if any company does not like it it can of course refuse to open stores in Italy. Alternatively it can charge more for its products in Italy than elsewhere in Europe – which may encourage the people of Italy to elect a different government.
What a company should not be able to do is pay tax on profits made in Italy to the government of Ireland or Luxemburg at 20% of what it is in Italy to avoid paying any to the Italian government. And that is the fault of the EU mismanagement of European trade arrangements
Tim Cook really needs to focus.
What has this tax thing got to do T.C’s focus?
Well : this problems happened either:
1) Apple did try fraud (which is bad)
2) Apple’s lawyers and accountants screwed up and didn’t clarify with Italy’s tax authorities before they did what they did or they are RIGHT but LOST the case (which is also bad)
being taken to task for ‘FRAUD’ and paying up is horrible.
Horrible, horrible P.R.
T.C NEEDS TO FOCUS ON HIS STAFF NOT SCREWING UP.
There has been too many issues with product launches, buggy software and poor marketing (marketing? yeah like: Macs make as much money as iPads yet NO Mac ads this Christmas not even cheap web ads, practically none for the last five years and the stock is down because they say Apple is a ONE product company. WTF with this no mac marketing? )
T.C all the ‘social services’ stuff you do is probably for a good cause but most of it has nothing directly to do with Apple and Apple like pointed above has too many issues this year so Focus on Apple’s BUSINESS (products, marketing, staff screw ups) first PLEASE , because if Apple falls apart you voice on social issues will mean nothing but will actually sound hollow (no one listens to a loser).
as an investor I’m not too happy with the zero gain this year and Apple’s P.E half of Msft’s, lower than the S&P AVERAGE. As a consumer I’m disappointed with some of the product launches ( beta issues many AVOIDABLE like the poor Apple Music interface, no guide at launch, no Apple TV remote app etc ) . T.C you need to FOCUS.
Oh, but there’s a gay pride parade next week and Timmy has to pick out which one of his many mom jeans he’s going to wear while prancing.
What’s wrong with gay pride? And what does this have to with firing Tim Cook? Don’t like homosexuals running this joint? I think he is doing fine, and I support LGBT and Autism rights. Let him be what he wants to be.
Anyone who thinks Tim Cook “is doing just fine” isn’t trying to use Apple’s products lately. Beta-esque is being kind.
There’s nothing wrong with “gay pride.” Just don’t use the company Steve Jobs entrusted you with to promote your own personal agenda and, if you stupidly do, expect criticism for not being focused on your real job when things like having to pay over 1/3rd of a billion dollars to settle tax fraud investigations pop up.
How is he using Apple to push his personal agenda?
Tim Cook is a person. He is not on the job 24/7. Just as with anyone else he is and should be free to voice his personal opinions during his personal time away from work.
If you weren’t so blinded by your hatred for Tim Cook, you’d see exactly what’s going on within Apple right now… They are refocusing and restructuring so that all the “issues” they’re having now, can’t and won’t happen again in the future. That was the Apple Steve left Tim. These types of corporate changes take years before everything can fall into place.
“How is he using Apple to push his personal agenda?”
Here are a few examples:
“We don’t want to debate climate change. We want to stop it.”
http://www.apple.com/environment/
“Diversity is critical to innovation and it is essential to Apple’s future.”
http://www.apple.com/diversity/
“We’re joining President Obama in support of the ConnectED initiative.”
http://www.apple.com/education/connectED/
Using Apple Inc. to produce “Pride” videos:
Cook’s attempt to silence debate is galling and so very typical of the Progs.
I refuse to be silenced.
As per global warming:
1. I require verifiable facts, not specious temperature data that’s been fudged in order to create a desired outcome and promote a hidden agenda.
2. The “natural cycles” have occurred for billions of years prior to the industrial revolution and will occur for billions of years to come.
3. When the data can be massaged to produce whatever outcome is desired, I’m not buying it.
4. The ease with which you Dem/Lib/Progs fall for a ruse designed to facilitate the transfer of monies from wealthy countries to the world’s shitholes is what’s really alarming here. “Question authority.” Isn’t that what your hippie parents used to chant on the commune? You pawns just line up, hop on board, and do what you’re told to do by ABC, NBC, CBS, Jon Stewart, Tim Cook, etc. I prefer to think for myself, thanks.
I entirely disagree, anonymous coward ‘Fire Tim Cook’. I know this blows the blood vessels of BizTards around the world, but Apple requires itself to be a RESPONSIBLE CORPORATION, one that TAKES RESPONSIBILITY for its actions (well, mostly!).
Every item on your list fits into the category of corporate responsibility, leading to this conclusion:
BRAVO TIM COOK and APPLE!
Meanwhile, I entirely agree, as we’ve often ranted here before, that Apple is losing FOCUS and Tim Cook, being the boss, is in charge of bringing Apple BACK into focus.
Get Busy Tim! (Actually, I sense he has started this process already with the new hires and executive juggling. We shall see).
Enough of these hits, combined with Apple’s lengthy recent run of half-finished/ill-conceived products, plus AAPL stock’s poor performance and even Tim Cook will be bounced out on his ass.
Even his gay protective coating —— like Obama, just for being “black” (never mind his total incompetence) he’s a “hero” to the Liberal/Progressive/Democrat degenerates who are destroying our country —— won’t be able to save him.
It’s Italy. Right or wrong, you’re not going to win a case in Italy, even if you’re the Prime Minister and pass laws preventing you from being prosecuted.
Using a loophole in the law is not fraud. It’s shoddy law making by those that wrote and agreed to it; Italy being one of them.
The tax laws being used by multinational corporations have been in place and taken advantage for many years now. The only thing that’s changed since then is that these stupid politicians in these countries are getting desperate to balance their budgets by any means necessary. Why not go after those that have taken advantage of their ignorance?
“Well that loophole wasn’t supposed to be there, so you owe us for all those years of ‘fraud’.”
The only fraud committed was by the politicians who told their constituents that were competent law makers.
Oops…
The only fraud committed was by the politicians who told their constituents that THEY were competent law makers.
Italy: The same country that stole an entire continent from the natives that were already living there circa 1492. Why should anyone listen to their laws when they essentially invented terrorism?
Well, indirectly. Spain paid for it all and made the most profit from pillaging the ‘new world’, not Italy.
I’ve always wondered about ‘loopholes’.. Just because they exist does it become ‘right’ to use them? Legally their use can be argued for but how does that reflect on the ethics of the individual or company making use of it?
SEE!!! and they are just getting started.
If Italy really has a case, why settle? Particularly for only about 40% of what was owned.
Why not go for the whole €880? Additional fines would seem appropriate as well.
Maybe Italy doesn’t have as much of a case as it would appear.
If no case why settle.