Apple to Pay 318 Million Euros in Italy to Settle Corporate Tax Probe

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Apple LogoApple has agreed to pay 318 million euros in Italy to settle an investigation that determined the iPhone and iPad maker failed to pay nearly triple that amount in corporate taxes in the country over a five year period, according to Italian newspaper La Repubblica.

Italian regulators in Milan concluded a tax probe of Apple in March, accusing the company of booking profits generated in Italy through an Irish subsidiary in an effort to lower its taxable income base and save 879 million euros between 2008 and 2013.

Apple has yet to comment on the deal, but previously said it has paid all necessary taxes in countries that it operates. "These new allegations against our employees are completely without merit and we’re confident this process will reach the same conclusion," the company said in March.

Apple Italia is part of the company's European operation headquartered in Ireland, where Apple pays a significantly lower corporate tax rate compared to other EU countries. Ireland has a corporate tax rate of 12.5% for normal business activities, compared to a standard rate of 27.5% in Italy, per The Guardian.

Apple faces a similar Irish tax probe by the European Commission, which formally accused the company of receiving illegal state aid from Ireland in September 2014. A decision in the lengthy investigation has likely been delayed until early 2016, as the Brussels-based executive cabinet has requested supplementary questionnaires.

Apple's tax policies in Europe have come under intense scrutiny over the past three years, as the company is said to utilize multiple subsidiary companies located in the Irish city of Cork to move money around without significant tax penalties. Apple continues to deny any wrongdoing, and CEO Tim Cook recently described the accusations as "total political crap" on 60 Minutes.

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62 months ago

This sounds like Italy's case was weak and Apple settled to make it go away. It's 1/3 of what Italy was seeking. Remember Italy is in a weak budgetary position (not much better than Greece) and is in shakedown mode. It happens here at the state level. Suddenly what had been accepted practices for years become "abusive." Usually the two sides reach a settlement and practices change prospectively. I've seen this happen with much smaller companies. I wouldn't be surprised if the larger EU probe ends the same way.

If that was that weak, Apple wouldn't have paid anything.
Score: 24 Votes (Like | Disagree)
Avatar
62 months ago

This sounds like Italy's case was weak and Apple settled to make it go away. It's 1/3 of what Italy was seeking.

It is called a plea bargain where when guilty you take the best you can get so you do not take the chance of getting the worst possible result. If it was that weak they would have fought it for the win.
Score: 15 Votes (Like | Disagree)
Avatar
62 months ago

Apple paid what it was owed. However, the Italian government decided to move the goal posts to get more money from Apple, the same way that other companies try their best to swindle money from Apple.

Can you imagine how many people they have working to do Apple's taxes. Big companies will always use the unfixed loop holes. If they are there, use them.

Don't be such a fanboy. "Swindle" money from Apple? Pay your damn taxes and stop using loopholes. Apple doesn't know you, doesn't care about you, you're a number to them, a stat.

Defending them means nothing to them. People need to quit defending tech companies like they're a family member. What's even more hilarious is that you pay them for a device for the "privilege" to do so.
Score: 11 Votes (Like | Disagree)
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62 months ago
Yeah Tim. You really pay "every dollar" you owe.
Score: 11 Votes (Like | Disagree)
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62 months ago
This is the scourge of the tech industry.

How many iPhones does Apple sell in Luxembourg, Ireland or the Cayman Islands ?
Score: 9 Votes (Like | Disagree)
Avatar
62 months ago
This sounds like Italy's case was weak and Apple settled to make it go away. It's 1/3 of what Italy was seeking. Remember Italy is in a weak budgetary position (not much better than Greece) and is in shakedown mode. It happens here at the state level. Suddenly what had been accepted practices for years become "abusive." Usually the two sides reach a settlement and practices change prospectively. I've seen this happen with much smaller companies. I wouldn't be surprised if the larger EU probe ends the same way.
Score: 6 Votes (Like | Disagree)

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