Apple probed for alleged tax fraud in Italy: report

Apple probed for alleged tax fraud in Italy: report

Summary: The iPhone and iPad maker is accused of hiding more than $1.3 billion from the European country's taxman, according to reports.

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TOPICS: Apple
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One of Apple's retail stores (Image: Apple)

Apple is accused of hiding more than €1 billion ($1.34bn) from Italy's taxman, which may lead to civil or even criminal sanctions against the technology giant.

First reported by Italian media, and confirmed to Reuters citing a judicial source with knowledge of the situation, an investigation into the company's tax affairs is "under way."

No details were given by the source, however.

Italy's tax laws are known to be particularly aggressive, particularly in recent months and years, following a series of multinational corporations accused of avoiding or evading paying tax in the country. The corporate tax rate in Italy currently stands at 31 percent, much higher than the U.K.'s, which pegs in around 24 percent. Even then, many Silicon Valley giants in Britain have still been accused of funnelling profits into overseas banks in order to avoid paying the full near one-quarter of all profits in the country.

Meanwhile in the U.S., where Apple has also faced Congress over its tax setup, the country's main financial regulator recently cleared Apple's tax strategy. The U.S. Securities and Exchange Commission did not find anything nefarious about the company's structure, despite being accused by Congress of using a system dubbed the "Holy Grail of tax avoidance."

The last time Apple saw a major fine in Italy was in March 2012, after it was found to have broken Italian consumer laws. Apple was fined $1.2 million for "misleading" customers over its AppleCare extended warranty protection plan.

We reached out to Apple for comment but did not hear back at the time of writing. We will update the piece if we hear back.

Topic: Apple

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16 comments
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  • the 150 billion war chest is too enticing to ignore

    Some of that money needs to be redistributed from your bank account to ours, even if we have to write new laws err... reinterpret laws. :-)
    greywolf7
    • Agreed

      Another European country in need of a bailout trying to scam US corporations for the money they need. Why don't you fix your own problems instead of trying to steal from others? Seriously!
      Tiggster79
      • so I assume...

        It's cool to evade tax all over the globe , including the holy grail of the US, providing the company is an American company? If it were Samsung evading tax in the US would you have the same response?
        AJRimmer
        • You aren't evading taxes when

          you obey tax laws. To maintain otherwise is to accuse yourself of tax evasion when you take your home mortgage interest deduction.
          baggins_z
          • Hence

            the court case. The question is, have Apple only done legal tax avoidance or have they also been involved in tax evasion?

            The local prosecutor seems to think it is the latter. Now it is up to them to prove their case.
            wright_is
      • so I assume...

        It's cool to evade tax all over the globe , including the holy grail of the US, providing the company is an American company? If it were Samsung evading tax in the US would you have the same response?
        AJRimmer
  • Tax Fraud?

    Heads should roll!
    Foreseen
    • Of course, not; it is the same thing as it was in USA

      Investigation showed that Apple pays all taxes (hence it is #1 tax payer in the USA).

      Italy's investigation will result in nothing as Apple pays there all taxes, too -- of course.

      Apple -- as well as all others such as Google, Microsoft, Samsung -- has distribution centre in Ireland, where most profits are accumulated because Apple sells the goods to its European subsidiaries at expensive prices, only leaving little profits in the fields to be taxed at high local corporate income taxes.

      However, this is perfectly legal and it works for decades.
      DDERSSS
  • Here we go again!

    Maybe it would be easier to write some tax law that can be understood. I doubt that Apple is guilty of anything. They end up spending large sums of money to study tax code so they can minimize the loss of revenue to a particular government. Once the idiot politicians in a given country determine that you have to much they go out of their way to find a way to steal. I doubt the same politicians could read their own tax code and give an explicit answer on the actual tax ramifications of their code.
    Neverhood
  • Obey the law...

    If Apple wants to do business in Italy, or any other country for that matter, then it has an obligation to obey the laws of that country, period. The tax rates that hold in any given jurisdiction are a matter for the lawmakers, and just because it is 31% in Italy, 24% in the UK or 2% some other place does not allow Apple, or anyone else for that matter, to break the law of Italy and illegally funnel all its profits to the country that has 2% say. Morally at least the tax should be paid where the profit is made. Oh wait, American corporates don't have any morals, silly me!
    Master668
    • perfectly put.

      equally , what is the point in evading tax to compile such an obscene volume of cash dotted around the world. wherr will it go., what can you do with it?
      AJRimmer
      • Re: what can you do with it?

        For example, pay "taxes" that someone invents you owe in their jurisdiction?

        As they say, it is not about the money, but about the quantity.
        danbi
  • Obey the lawss

    what the matter.... tell me....
    johncena39u
  • Italy...

    A country where you are rarely given receipt in exchange of your money. Or of given one, it is hardly registered with the tax office and tax being paid...

    If Apple has neglected paying taxes, they should of course pay. But almost nobody in Italy pays taxes, so they should really look at their backyard too.
    danbi
  • Italy...

    Where they keep trying and retrying until they get the verdict they want.
    greywolf7
  • Surtax

    Apple could just put a 31% surcharge on the product then pay the tax.
    Richardd43