Italian government levels tax fraud accusation at Apple, raids local HQ
Authorities have seized equipment from Apple's Italian headquarters in the course of an investigation into accusations that the company shielded more than ?1 billion in profits from Italy's tax authorities, according to a new report out of Milan.
Apple's Via Roma store in Torino, Italy
Apple's Italian operation is said to have underreported taxable income of ?206 million in 2010 and ?853 million in 2011. The accusations were first reported by Italian publication l'Espresso and later confirmed by Reuters, citing sources in the Italian judiciary system.
The complaint alleges that the income was booked to Apple's Irish holding company, but should have been reported to Italian tax authorities as income derived from activities in Italy. The investigation includes two unnamed middle managers from the Cupertino, Calif.-based company.
Apple has reportedly challenged the seizure order that followed a search of the company's headquarters in Milan, and Italian appeals courts will take up the question of its validity. A timeline for that action was not specified.
l'Espresso notes that this would mark the second Italian inquest into Apple's tax strategy in the country. The first is said to have been closed for lack of evidence.
Apple's Via Roma store in Torino, Italy
Apple's Italian operation is said to have underreported taxable income of ?206 million in 2010 and ?853 million in 2011. The accusations were first reported by Italian publication l'Espresso and later confirmed by Reuters, citing sources in the Italian judiciary system.
The complaint alleges that the income was booked to Apple's Irish holding company, but should have been reported to Italian tax authorities as income derived from activities in Italy. The investigation includes two unnamed middle managers from the Cupertino, Calif.-based company.
Apple has reportedly challenged the seizure order that followed a search of the company's headquarters in Milan, and Italian appeals courts will take up the question of its validity. A timeline for that action was not specified.
l'Espresso notes that this would mark the second Italian inquest into Apple's tax strategy in the country. The first is said to have been closed for lack of evidence.
Comments
My impression of Italian prosecutors, based on a couple of recent cases receiving international attention is that they don't like tobloseconce they have decided some one is guilty. And, they will keep charging their target with crimes until the court's see it that way.
"The investigation includes two unnamed middle managers from the Cupertino, Calif.-based company. " Convenient, we'll see how this plays out.. If we see names, or not..
Italy's justice system is a joke.
$1B is probably less than the entire inventory Apple sold in Italy which is a country known to be not very iOS friendly.
A storm in a cappuccino.
Just wait till you see how this story is plastered all over the tech blogosphere as undisputed fact. The shrieks of joy from the usual suspects will be loud and long.
Italy is probably owed some taxes. Since Apple is a US company and has a headquarters in Italy, what does Ireland have to do with any of this? Sounds fishy to me.
It's European headquarters are in Ireland.
Italy is probably owed some taxes. Since Apple is a US company and has a headquarters in Italy, what does Ireland have to do with any of this? Sounds fishy to me.
A little thing called the EU.
A Cupertino cappuccino storm?
Morning breaks. Join us, dear viewer, as we position our cameras near a large money pile. We won't have long to wait. Hark! Here's one now! Listen to the mating call of the red-throated politician bird...
"Gimme!! Gimme!! Gimme!!"
So lovely. Soooo lovely.
First it is Italy folks, it is not the cradle of business ethics that is for sure.
They went after apple about the warranty issue and now they are claim tax fraud, next it will be murder.....
While I sadly agree with you Italy is probably doing this in a... let's say not-so-clearly-honest way, the fact three european countries now question the system's failures, not only for US-based Apple but also European oil companies and Telcos surely is a sign that it's not exclusively Apple-hate.
I also understand that stockholders have a vested interest in not "understanding" that taxes are important to the country profits are made in, but quite obviously, there is a reason why some companies, based in some countries, are so much richer than others. And no, it's not "think different" for oil and banks. It's not magical technological advantages. It might, however, be savvy tax avoidance, and even if that's legal (which is the matter here), the question of the validity of that legality is a very good one.
So, I guess, we'll see if Italy's complaint is valid, we'll see if the UE sets better rules (because Italy or France or the UK alone can hardly do anything, but the UE can discuss rules with the USA on more... equal footing), and we'll see what happens next.
I also notice that when the same countries and courts rule against Samsung, their rulings aren't as badly received here.
Hopefully international corporations will learn that the benefits of hiding their income from the country that made it possible in the first place (i.e. U.S.) are outweighed by the truth of the old bromide "You lie down with dogs, you get fleas."
(And yes, I own AAPL.)
Well, it doesn't make sense. Someone just needs money and/or attention, it seems. However, I still can't understand how Apple gets away with 1 year guaranty when they are forced by law to give at least 2.