Apple Under Investigation for $1.3 Billion Italian Tax Fraud

[phoenixsan]

Basing my opinion.....

only in this article, I am in the mood to repeat my opinion written in other places of the Forums, when the tax/claims/suits issues get Apple: Any that want or can get a piece of the ivory tower, will go for it.....(and I am not saying all claims are supported or unsupported)

Apple already had lost a legal battle in Italy regarding warranties, if my memory works. So, I think they are bound to lost this claim too...........

 

[diazj3]

It does sound a bit like a shakedown. Italy is known for corruption.

Well, yes, that may be true... although corruption is almost everywhere.

And furthermore, so are Big corporations. American corporations.... the way they bend, break or buy the law. And Apple specially when is comes to taxes. They go through huge trouble to cheat and avoid paying taxes, even in their own country! Have you forgotten Tim Cook's recent trip to Washington to explain this to a senate commitee?

I mean, Apple is no saint. At all. So when I read that Apple may be in legal trouble over taxes, it makes sense, regardless of the country.

cheers!

Ps. I'm not Italian btw.

 

[9000]

When your country is going bankrupt you will do anything to pay the bills.

LOL at Cyprus!

 

[macs4nw]

Some American users responses to this make me chuckle wholeheartedly

Glad to know you're ok with multinational corporations like Amazon and Apple avoiding (even in perfectly legal ways) to pay billions in taxes both in the US and Europe every year While regular US and EU citizens pay taxes to the last cent.

Yeah a shakedown...because we're talking about companies who NEVER practiced any kind of tax avoidance and do their best to contribute with taxes to the countries where their businesses take place....right.

Nothing wrong in LOOKING INTO the matter. Apple doesn't lack lawyers to defend itself.

And looking into it, they will of course, and should. But when all is said and done, I expect this to be no more than a difference in interpretation of local tax laws, or an oversight of exceedingly complex tax rules.

There's no way on earth Apple would deliberately try to screw Italy out of taxes owing. Their are scrutinized to the hilt all over the world, and know this very well. Their monetary losses due to loss of credibility and respect alone, would be many times what they allegedly owe the Italian government.

They, like all multinationals, actively pursue legal tax reduction strategies, and that's no different than you or I doing this on our own personal tax returns.

Apple would not, imho, go down "that" path, and risk squandering so much goodwill. If they did, many people the world over, who look up to Apple as a beacon of how businesses should conduct themselves, and interact with their customers, would be severely disappointed.

 

[srsub3]

you are so smart to make fun of italy, eh? I'm wondering if you have read newspapers in the last months... big US companies aren't paying taxes in European countries because they made parent companies in Ireland... to be honest I think it is a right thing this action by my government, because I don't understand why in Italy I have to pay the same apple US product 30% more, while they are paying less taxes, moreover not to my government....
and then Apple says products are more expensive because of Italian laws!
I'm not crazy, just check at the applestore, where they say that per every iPhone they have to spend more than 100 euros in taxes:
http://store.apple.com/it/buy-iphone/iphone5s

 

[JAT]

That happened in Greece and no one paid tax. This almost bankrupted the country. Individuals and business should pay their share of tax and be done with it. If loopholes exist, then that is the government's responsibility to close the loopholes.

So I agree with you. All the loopholes need to be closed. And you should need a real reason to sue big business, not just to try and milk the business dry. Then there is the argument of "what is a fair amount of tax" but that is outside the scope of this discussion and a topic that both sides will never agree on.

Perhaps you could explain what loopholes you want closed.

 

[mabhatter]

if Apple is illegally avoiding taxes, by all means, go after them for the owed money and penalties.

However, just because they may not be paying as much as you would like them to be, does not, in and of itself, constitute fraud or avoidance.

We shall see where this lands. I feel it will go no where, and just waste more Italian tax payer dollars and turn up nothing, but we shall see.

I'd have to chip in that Italian prosecutors don't have a real good grasp on making good case choices that lead to proper outcomes. He MO seems to be throw what you can, then the next prosecutor blames the first for.corruption to keep reopening the case over and over.

Italy is the poster child for why the USA uses Common Law and not Civil law, as well as why we have a constitutional prohibition on "double jepordy".

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Like you know how much business they do in Italy.

It would be wise if you'd think before you speak. Italy has a population of 60 million people. That's a little under what Texas and California have combined, the two biggest populated states in the US, which amount for 20% of US's total population.

I'm sure Tim Cook will just gladly ditch Italy.

Again, it would be wise if you'd think before you speak.

Except Italian prosecutors have developed a habit of going after international businessmen, not the actors in Italy "guilty" of operations. They already pulled that crap on Google because they didn't like that Google -USA didn't fully comply with a judgement Google -Italy followed and tried to arrest US citizens that were merely the bosses of Google in Italy.. Tim would certainly drop Italy with extreme prejudice should they pull a stunt like that... And that seems to be their thing lately.

 

[EmpyreanUK]

I hope Apple is holding out on them and threatens to take its stores out of Italy. Its only a small country and wont be missed business wise.

Italy is the 8th/9th largest economy on the planet, you moomin.

 

[dangerly]

I hope Ireland finally changes their law so Apple has to pay some taxes...

And thumbsup for italy.

I quote this 100%

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Agreed - I love Italy - lived there for six months this year. But they have their own way of governing - which is incomprehensible to the rest of us. Basically, church and mafia rule. I think they even collect protection money from shop owners. There are surprisingly few foreign chain stores even in Rome and Florence. Apple's too big not to target.

This is totally untrue.

 

[the8thark]

Perhaps you could explain what loopholes you want closed.

http://www.smh.com.au/business/worl...st-corporate-tax-loopholes-20090505-asug.html
Stuff like this.

 

[dangerly]

Hi, I'm Italian. I want to clarify a couple things.

It's true that we're having some problems but most of the Italian debt is owned by Italians families and companies. Most people here own a house, some more than one and many also have substantial founds. For this reason, unless all people leave the country, bankruptcy is not really an option.

It's also true that mafia and church have a role here but they don't control the country.

The problem that some big companies are facing here is that they move the revenue out of the country and leave the costs here. And this is not acceptable given the free services the companies and their employees get here.

A simplified example: the company has a warehouse in Italy. People working there are hired by another company in Ireland. But they live and work in Italy.
The company earns 1000 euros but the cost for people is 990 (not the real cost obviously they higher the better). In Italy they only pay taxes on 10. But when one of the employees needs to go to the hospital they get it for free. They may also get a free home.
For these services all Italian workers and employers pay a tax. Warehouse employees does not but they get the services.

I don't think anyone can say this fair. The Italy IRS is now looking into these cases.
Other famous companies are amazon and Ryanair.

Hope this can help understanding what's going on. I don't know if Apple is doing this but if they do you can probably see why they're being investigated.

All you have written is true.
Too many users of this forum have a totally distorted understanding of Italy, and of EU.
Illegal affairs, tax evasion and corruption exist in every country, U.S.A. included, and there is nothing wrong in the investigation done by governments.

 

[the8thark]

I hope Ireland finally changes their law so Apple has to pay some taxes...

And thumbsup for italy.

So you agree with Italy trying to milk the Apple cash cow?

 

[EmpyreanUK]

So you agree with Italy trying to milk the Apple cash cow?

Get a grip: Italy's sovereign debt is absolutely vast. A brief glance at the Wikipedia page for the Italian economy shows me that the sovereign debt stockpile currently stands at 126.1% of annual GDP, which is over $2 trillion. Do you seriously think that the Italian tax authority's interest in the tax affairs of Apple is some nefarious attempt at plugging the gaping whole left by a decade of stagnant growth, abysmal economic governance and chronic over-spending?

Really?

I am aware that you have not directly alleged this in your post, and will no doubt dismiss my reply by churlishly refraining as such, but what else could you mean claiming Italy is attempting to 'milk the Apple cash cow'?

I'd ask everybody else in this thread who is thumping this absolutely ridiculous tub to take a step back and perhaps try to tally the logic of these accusations, purporting a land-grab being waged by the Italian state against Apple, with the numbers involved, but frankly such reasoning would patently be beyond the imbeciles mindlessly regurgitating this nonsense.

I find it exasperating. This forum can make it pretty hard to be an Apple fan at times.

 

[dangerly]

Get a grip: Italy's sovereign debt is absolutely vast. A brief glance at the Wikipedia page for the Italian economy shows me that the sovereign debt stockpile currently stands at 126.1% of annual GDP, which is over $2 trillion. Do you seriously think that the Italian tax authority's interest in the tax affairs of Apple is some nefarious attempt at plugging the gaping whole left by a decade of stagnant growth, abysmal economic governance and chronic over-spending?

Really?

I am aware that you have not directly alleged this in your post, and will no doubt dismiss my reply by churlishly refraining as such, but what else could you mean claiming Italy is attempting to 'milk the Apple cash cow'?

I'd ask everybody else in this thread who is thumping this absolutely ridiculous tub to take a step back and perhaps try to tally the logic of these accusations, purporting a land-grab being waged by the Italian state against Apple, with the numbers involved, but frankly such reasoning would patently be beyond the imbeciles mindlessly regurgitating this nonsense.

I find it exasperating. This forum can make it pretty hard to be an Apple fan at times.

I agree totally with you.

 

[Thunderhawks]

Apple makes billions upon billions, why would they even bother trying to cheat for $1.3B? It literally makes no sense. They are extremely thorough. This is Italy trying to muscle 'em for some cheddar.

It wouldn't be the first time that an American company relies on their foreign subsidiary to be familiar with local laws.

(See warranty issue)

Maybe just a case where the Italian government wants to use "interpretation" of certain laws to get some money.

Obviously a public company like Apple-always in the spotlight- is not interested in
illegal tax evasion.

Legal tax evasion yes, but even then too many jealous people and freeloaders wanting a shot at their cash.

 

[the8thark]

Get a grip: Italy's sovereign debt is absolutely vast. A brief glance at the Wikipedia page for the Italian economy shows me that the sovereign debt stockpile currently stands at 126.1% of annual GDP, which is over $2 trillion. Do you seriously think that the Italian tax authority's interest in the tax affairs of Apple is some nefarious attempt at plugging the gaping whole left by a decade of stagnant growth, abysmal economic governance and chronic over-spending?

No. Italy being in massive debt is not related to the Apple/Italy issue in my opinion. Italy are not using money from Apple to help fix their debt. They are targeting Apple just because they can.

What you say about Italy's debt is 100% true though.

 

[3333]

Currently there is only an investigation, there is no need of racist messages,
while the case samsung obama we know how it went in full respect of international law

 

[sofila]

As an Italian (yes, with capital I) i must thank MacRumors for giving us all a shiny opportunity to find out how many stupid persons are allowed to spread their arrogance all over the net.
I personally find amusing this equation: the more a person is unaware, ignorant, lout and boor, the more the same person wants everybody to know it.
This said:
There are laws. You respect them, you're ok. You don't respect them, you pay.
At least in theory. So: Apple is clean -> no problem. Apple is guilty -> please go to the counter.
I have yet to see a medical prescription that suggests the use of Apple Products so "take away the stores" is for the moment in TOP 10 of silly things of 21st century. Obviously follower racist comment "peaking of Italy, I hear Sotheby's is auctioning a bunch of Italian rifles from world War II. They are supposedly in pristine condition having only been dropped once" fighting for 2nd place with "Pay it and pass the cost on to Italian consumers to recoup. 16gb iPhone 6's for $5000 euros will get a couple of shakedown artist politicians ousted for sure."
Anyway MacRumors has enough clever guys to balance the idiots flourished in these last 2/3 years

I will end this rant with a quote from Jim Jarmusch's "Daunbailò (Down By Law)" (Tom Waits, John Lurie, Ellen Barkin) taken from Benigni's first appearance in the movie:
"Why don't you take a great ******, teste di cazzo"

 

[grigio60]

Ok.

I'm italian. I'm living in Italy. I'm PROUD being italian.

I read a lot of bul***it about Italy being bankrupting (sorry, maybe you're confusing with Greece): there's an economical crisis, that's true. But the country is not bankrupting. We're not starving. And we're paying our bills with our own pockets, not with Germany's ones. May I respectfully remind that it was US, and not Italy, going through a public service shutdown (never happened in our history) and very close to a public financial default less than one month ago? Please have a look at your own mirror first.

About Italy being almost synonimous of "corruption": nice. Just because some (not all) Italian politicians were involved on that, here you are a whole country considered as "inherently corrupted". Many thanks by the 99% honest italian citizens.

And almost everybody here appear to be forgetting a simple, basic point: *infringing the laws of a country is illegal*. Full stop. Laws apply to everyone at the same extent.

Now, frauding tax is illegal in Italy, as it is the U.S. and in most countries in the world. That's the pure and simple fact. So, why the hell should the Italian judges ignore an illegal act, such as heavy tax frauding? Or, according to some odd opinions I read here, since in your mind "Italy=corruption" then also laws shouldn't be applied? Please, come on.

Apple allegedly frauded over 1 billion euros, something close to 1.5 US$ billions. Would you have blamed an US judge, if she opened an investigation on a company frauding the US government for such an amount? Or would you instead think "Hey, that guy is doing the right thing"?

So: please, stop offending (uselessy and pointlessly) the italian people just because of your distorced and unreal image of my country.

Please, be respectful to judges who are just doing their job as HONEST people: having laws respected by everyone, no matters if big or little.

Please, be respectful to Italy, as italians are respectful to your countries.

Thanks.

 

[JAT]

http://www.smh.com.au/business/worl...st-corporate-tax-loopholes-20090505-asug.html
Stuff like this.

Close the doors, eh? You really think that is possible in the internet era?

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Please, be respectful to Italy, as italians are respectful to your countries.

Thanks.

You might want to be careful about what you wish for. Very few Europeans on this particular forum show any respect at all for USA residents.

 

[srsub3]

You might want to be careful about what you wish for. Very few Europeans on this particular forum show any respect at all for USA residents.

And now after all the big amount of stereotypes and stupid things said, I clearly understand why.
An Italian proud to be Italian

 

[skottichan]

And now after all the big amount of stereotypes and stupid things said, I clearly understand why.
An Italian proud to be Italian

Jingoism?

It's not just an American/Italian/Irish/etc disease. There are blindly devout citizens of every nation.

 

[the8thark]

Close the doors, eh? You really think that is possible in the internet era?

Yes. If people work hard towards it.

About Italy being almost synonimous of "corruption": nice. Just because some (not all) Italian politicians were involved on that, here you are a whole country considered as "inherently corrupted". Many thanks by the 99% honest italian citizens.

It's the 1% in any country that cause problems for the other 99%. Happens in every country. It's important cause their actions cause whole countries to suffer.

And almost everybody here appear to be forgetting a simple, basic point: *infringing the laws of a country is illegal*. Full stop. Laws apply to everyone at the same extent.

You also forget one simple point. Not all laws are fair and just for the citizens of it's country. One can do the right thing and still be a criminal, because of unfair and unjust laws. Every country has it's share of unjust laws. The issue here is not did Apple break Italian law. The Italians will make sure Apple has. The question is did Apple do the right thing? And is doing the right thing in this instance a crime in Italy. I'm sure in time we will know the answer to this one.

Now, frauding tax is illegal in Italy, as it is the U.S. and in most countries in the world. That's the pure and simple fact. So, why the hell should the Italian judges ignore an illegal act, such as heavy tax frauding? Or, according to some odd opinions I read here, since in your mind "Italy=corruption" then also laws shouldn't be applied? Please, come on.

What you say is correct. But as far as we all know Apple didn't commit tax fraud. But this also refers to the above point. The Italian government could call doing the right thing tax fraud. And thus Apple did nothing wrong but also committed tax fraud. So in this case being guilty of the crime and actually doing something wrong are two very different things indeed.

Apple allegedly frauded over 1 billion euros, something close to 1.5 US$ billions. Would you have blamed an US judge, if she opened an investigation on a company frauding the US government for such an amount? Or would you instead think "Hey, that guy is doing the right thing"?

I would say nothing. The US legal system is in a worse state than almost any other legal system in the world. Whistleblowers going to jail or convicted (Snowden, Manning and others), troublemakers ruling the streets and the government doing nothing to prevent this. So to me it would not matter if a US judge did this, I would have zero faith that a fair and just outcome would be reached.

Please, be respectful to judges who are just doing their job as HONEST people: having laws respected by everyone, no matters if big or little.

I feel sorry for you, if you really believe this. Judges to me earn their respect if they do the right thing in their job. And some of them do, but some of them do not.

Please, be respectful to Italy, as italians are respectful to your countries.

I am respectful to all countries. They all have their nice people. But they also have their not nice ones as well. I can say this without being impartial as I am neither Italian or from the US. I am Australian. And even us Australians have our not so good people. One of those not so good people was our PM for a few years just recently. But Australia is better now she is gone from politics.

You might want to be careful about what you wish for. Very few Europeans on this particular forum show any respect at all for USA residents.

I don't believe this is the case. Respect is earnt, not automatically given. And the few not so nice people will be hated against. Does not matter what country they come from. And people here like anywhere else give their thanks to the decent and nice people willing to help the world in their own little way and not harm it.

 

[gnasher729]

Or, y'know, the investigation actually turns up solid evidence of tax avoidance.

There is plenty of evidence of tax avoidance. Tax avoidance is entirely legal. It's legal by definition: Any legal ways to avoid paying taxes are "tax avoidance", any illegal ways to avoid paying taxes are "tax evasion".

But is there any evidence of tax evasion? I doubt it. "Tax fraud" would imply lying to the tax office. There's nothing that Apple is doing that they don't tell the tax office. There's always the possibility that a company and the tax office might disagree, in which case the tax bill is much higher than the company might like. But that has nothing to do with fraud or with tax evasion.

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and then Apple says products are more expensive because of Italian laws!
I'm not crazy, just check at the applestore, where they say that per every iPhone they have to spend more than 100 euros in taxes:

Yes, in European countries the advertised price usually contains sales tax (VAT) unless you advertise solely to businesses. In the USA, advertised prices don't include any sales tax. There are all the time people complaining about prices, and 99% of the time they are idiots who forget about these taxes.

But it is _you_ who is paying that tax. Apple is just responsible for taking your money and handing the tax portion straight over to your government.

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If they owe tax they owe tax and not paying it is fraud. Otherwise they can feel free to stop operating in the country.

Not paying tax that you owe isn't fraud. Not paying tax that you owe means that the tax office will send bailiffs around who confiscate your stuff, and if you don't agree with that they will send bailiffs accompanied by police. Stopping to operate in the country will not help, you still have to pay the tax you owe.

 

[gnasher729]

What actually happened...

It looks like Apple is accused of not declaring about 1 billion Euros in revenue. So even if that was true, there wouldn't be a payment of 1 billion Euros, but only the tax on that amount.

But then it also says that Apple actually told the Italian tax office that this money was booked through their Irish branch. So everything absolutely in the open. There is absolutely no justification for calling this "tax fraud".

Of course the Italian tax office _can_ and should check whether Apple has to pay tax on that money. If they think Apple has to then Apple will surely go to court about this, and if the Italian tax office wins, then Apple will have to pay those taxes. But there is absolutely no sign of fraud.