Apple to pay Italy $348M, sign accord to circumvent allegations of unpaid taxes

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To settle charges that it failed to pay corporate taxes, Apple will pay Italy's tax agency some 318 million euros -- about $348 million -- and sign an accord on managing its liabilities from the 2015 fiscal year onwards, a report said on Wednesday.




A judicial probe including three Apple managers is still ongoing, but the settlement will probably have a positive impact on the investigation, a source informed Reuters. The planned accord is expected to be signed in early 2016.

Apple is accused of owing some 879 million euros on revenues generated between 2008 and 2013. As in some other parts of the world, the company exploited loopholes to have its Italian revenue taxed in Ireland at a much lower rate than it would normally pay.

Though CEO Tim Cook has defended such practices, claiming that Apple follows the law and pays everything it owes, various governments have begun scrutinizing or actively cracking down on tax dodges by multinational corporations. That includes Ireland itself, which under pressure from the rest of Europe is working towards closing some of the loopholes it has become infamous for.

Cook was even more aggressive in a recent 60 Minutes interview, not only defending the company's tax avoidance schemes but criticizing U.S. tax code as "backwards" and "awful for America," making particular reference to the sum it would owe on repatriated cash. Most of Apple's cash reserves are held overseas, and the company has periodically lobbied for a "tax holiday" that would allow it to put billions back into its American ledgers without diverting as much toward tax obligations.
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Comments

  • Reply 1 of 88
    xbitxbit Posts: 212member
    Well done for paying your taxes, Apple.
    mdriftmeyerargonaut
  • Reply 2 of 88
    mjtomlinmjtomlin Posts: 1,774member
    sog35 said:
    And the stock is down $6 billion today because of a $300 million fine.

    Friken ridiculous.  Its time to fire Tim Cook and install a CEO who knows how to deal with Wall Street. 

    LMAO

    This has to be the dumbest comment ever posted.
    MacProrogifan_oldmwhitemdriftmeyericoco3ronnredgeminipajustbobftrustnoone00argonaut
  • Reply 3 of 88
    Shouldn't Italy's beef be with Ireland, not Apple?
    icoco3
  • Reply 4 of 88
    This will only get worse as the European experiment continues to fail. And it's coming soon to the US as the debt load is only going to increase. 
    rogifan_old
  • Reply 5 of 88
    sog35 said:
    And the stock is down $6 billion today because of a $300 million fine.

    Friken ridiculous.  Its time to fire Tim Cook and install a CEO who knows how to deal with Wall Street. 
    Are you a large investor in APPL? Why do you care about the stock price?
  • Reply 6 of 88
    Shouldn't Italy's beef be with Ireland, not Apple?
    I thought that all of these tax laws in EU countries were supposed to be "harmonized"? That wasn't Apple's fault. Apple should sue the EU for unfair trade practices and lodge a formal complaint with the WTO.

    If this "tax disaster" continues (and it could potentially cost Apple many billions in lost profits), Tim will be fired. The shareholders will demand it and the Apple BOD will be obligated.
    edited December 2015
  • Reply 7 of 88
    I think the only real reason for Apple stock being undervalued despite the company outperforming in terms of revenue and profit growth is because of the Steve Jobs legacy. People are still waiting for that breakthrough product release (post Steve Jobs oversight) that will sell in droves. I think the fear investors have is that one quarter of negative growth will tank the stock and impact them. A breakthrough product on the other hand puts to rest the fact that things have finally moved after Steve Jobs. I am not saying that products released in the past couple of years are not innovative, however, they have not been disruptive either.
    edited December 2015 justbobfargonaut
  • Reply 8 of 88
    I think the only real reason for Apple stock being undervalued despite the company outperforming in terms of revenue and profit growth is because of the Steve Jobs legacy. People are still waiting for that breakthrough product release (post Steve Jobs oversight) that will sell in droves. I think the fear investors have is that one quarter of negative growth will tank the stock and impact them. A breakthrough product on the other hand puts to rest the fact that things have finally moved after Steve Jobs. I am not saying that products released in the past couple of years are not innovative, however, they have not been disruptive either.
    It's unlikely we'll see such a breakthrough since Steve was uniquely qualified and positioned. We're more likely to see breakthroughs from smaller startups with owners who are willing and able to risk everything.
    edited December 2015 justbobf
  • Reply 9 of 88
    sog35 said:
    Are you a large investor in APPL? Why do you care about the stock price?
    I own Apple shares.  And yes I'm pissed off that Tim Cook is such a crappy CEO in communicating with Wall Street.

    Cook is great with supply chain details but he SUCKS at articulating Apple's vision.
    I'd much rather have a supply chain expert in charge than a business major who good at bullshitting to wall street and the media. Unless I owned APPL shares, then I could not care less about it's price.
    justbobfargonaut
  • Reply 10 of 88
    sog35 said:
    I own Apple shares.  And yes I'm pissed off that Tim Cook is such a crappy CEO in communicating with Wall Street.

    Cook is great with supply chain details but he SUCKS at articulating Apple's vision.
    I'd much rather have a supply chain expert in charge than a business major who good at bullshitting to wall street and the media. Unless I owned APPL shares, then I could not care less about it's price.
    Many who post here own Apple stock. Most happen to like the company also.
  • Reply 11 of 88
    ac1234ac1234 Posts: 138member
    sog35 said:
    I own Apple shares.  And yes I'm pissed off that Tim Cook is such a crappy CEO in communicating with Wall Street.

    Cook is great with supply chain details but he SUCKS at articulating Apple's vision.
    I'd much rather have a supply chain expert in charge than a business major who good at bullshitting to wall street and the media. Unless I owned APPL shares, then I could not care less about it's price.
    It is not an EITHER OR expectation - the CEO is responsible for both !!!!
    edited December 2015
  • Reply 12 of 88
    croprcropr Posts: 826member
    It is European law (and not a loophole), that revenue (and the related profits) can be moved from one EU member state to another. In other words it is  sufficient to have a single company e.g. in Ireland that takes care of all business in the EU.  But it is not allowed to use "clever" tricks to pay only 2% corporate tax in Ireland instead of the normal 12.5%, because this is considered as state aid from Ireland to Apple,  which is considered as anticompetitive in the EU. So Italy claims that Apple abused the Irish tax law on the the revenue moved from Italy to Ireland.  Apparently Apple want to get rid of this burden and decided to pay.
    justbobfargonautmaxit
  • Reply 13 of 88
    cropr said:
    It is European law (and not a loophole), that revenue (and the related profits) can be moved from one EU member state to another. In other words it is  sufficient to have a single company e.g. in Ireland that takes care of all business in the EU.  But it is not allowed to use "clever" tricks to pay only 2% corporate tax in Ireland instead of the normal 12.5%, because this is considered as state aid from Ireland to Apple,  which is considered as anticompetitive in the EU. So Italy claims that Apple abused the Irish tax law on the the revenue moved from Italy to Ireland.  Apparently Apple want to get rid of this burden and decided to pay.
    Then Apple has a solid basis for suing Ireland for fraud, haven't they?
  • Reply 14 of 88
    ac1234 said:
    I'd much rather have a supply chain expert in charge than a business major who good at bullshitting to wall street and the media. Unless I owned APPL shares, then I could not care less about it's price.
    Its is not and EITHER OR expectation - the CEO is responsible for both !!!!
    That isn't true. The CEO isn't necessarily in charge of the supply chain. Supply chain management involves mathematical and statistical modeling, which Cook, being an engineer, was qualified for. Steve Jobs wasn't.
    justbobf
  • Reply 15 of 88
    cropr said:
    It is European law (and not a loophole), that revenue (and the related profits) can be moved from one EU member state to another. In other words it is  sufficient to have a single company e.g. in Ireland that takes care of all business in the EU.  But it is not allowed to use "clever" tricks to pay only 2% corporate tax in Ireland instead of the normal 12.5%, because this is considered as state aid from Ireland to Apple,  which is considered as anticompetitive in the EU. So Italy claims that Apple abused the Irish tax law on the the revenue moved from Italy to Ireland.  Apparently Apple want to get rid of this burden and decided to pay.
    Then Apple has a solid basis for suing Ireland for fraud, haven't they?
    No
    justbobfargonaut
  • Reply 16 of 88
    sog35 said:

    I think the only real reason for Apple stock being undervalued despite the company outperforming in terms of revenue and profit growth is because of the Steve Jobs legacy. People are still waiting for that breakthrough product release (post Steve Jobs oversight) that will sell in droves. I think the fear investors have is that one quarter of negative growth will tank the stock and impact them. A breakthrough product on the other hand puts to rest the fact that things have finally moved after Steve Jobs. I am not saying that products released in the past couple of years are not innovative, however, they have not been disruptive either.
    This is Tim Cooks failure than. 

    Look at the CEO at Microsoft. He was able to leave the legacy of Mr Gates in the dust.

    The fears you mention are the fears of HARDWARE COMPANIES.  Apple is NOT a hardware company.  Do you think investors are worried about Google's hardware sales? Or Amazon's hardware sales? Or Microsoft's hardware sales?  HELL NO.  Because Wall Street does not view Google/Amazon/Microsoft as hardware companies.  But Wall Street and investors view Apple as a hardware company. That is a COMPLETE FAILURE of Tim Cook not being able to convince investors that Apple is much more than a hardware company.
    What kind of company is Apple? As far as I know, over 85% of it's actual revenue is hardware related.
    mwhiteicoco3thepixeldoc
  • Reply 17 of 88
    jonljonl Posts: 210member
    sog35 said:

    The fears you mention are the fears of HARDWARE COMPANIES.  Apple is NOT a hardware company.  Do you think investors are worried about Google's hardware sales? Or Amazon's hardware sales? Or Microsoft's hardware sales?  HELL NO.  Because Wall Street does not view Google/Amazon/Microsoft as hardware companies.  But Wall Street and investors view Apple as a hardware company. That is a COMPLETE FAILURE of Tim Cook not being able to convince investors that Apple is much more than a hardware company.
    What do the iPhone, iPad, and Mac profit percentages add up to?

    Now do the same for Microsoft, Amazon, and Google. (Well, you can't even begin to do so for Amazon, and it would probably be negative anyway.)
  • Reply 18 of 88
    MacProMacPro Posts: 17,514member
    Shouldn't Italy's beef be with Ireland, not Apple?
    You'd think so wouldn't you?
  • Reply 19 of 88
    sog35 said:
    What kind of company is Apple? As far as I know, over 85% of it's actual revenue is hardware related.
    Bullshit.

    At least 40% of iPhone's value is in the software and services.  
    iOS alone is worth $200 of the selling price.

    You can easily buy a phone that has the same hardware as an iPhone for $300-$400.
    The extra $200-$300 is paying for software/services/ecosystem.

    I can say the same thing about Mac sales, iPad sales, ect.
    Apple doesn't sell iOS. It sells iPhones.
  • Reply 20 of 88
    ac1234ac1234 Posts: 138member
    ac1234 said:
    Its is not and EITHER OR expectation - the CEO is responsible for both !!!!
    That isn't true. The CEO isn't necessarily in charge of the supply chain. Supply chain management involves mathematical and statistical modeling, which Cook, being an engineer, was qualified for. Steve Jobs wasn't.
    You obviously have no corporate or management experience - the CEO IS RESPONSIBLE for everything within the corporation.
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