Apple faces €1bn tax probe in Italy, claim legal eagle insiders Apple will be investigated in Italy for allegedly owing almost £1bn to the Euro nation's taxman, it was claimed last night. News agency Reuters quoted a unnamed judicial source who said the "checks on the size of the tax are under way". Since the news broke last night, the fruity firm's spokeswoman Kristin Huguet has told Sky …
""We are broke. If we dont we will have to borrow more from Germany.""
Actually, this is a fine example of a US firm operating in a manner that is fully compliant with local culture and practice. According to the Economist, there was an estimated €285 billion of evaded taxes outstanding in Italy last year, amounting to 18% of GDP.
The Italian government is now trying to crack down on the whole tax dodging culture, and you might suspect that Apple are no more or less in the spotlight than any other profitable customer. However, raking in the taxes from local tax dodgers won't really help the Italian economy, since it takes the money off of people who would otherwise spend or save it, and in net terms it reduces Italian consumption and investment by an equal amount that it fills in a tiny fraction of the government's debt pit (a pit that is €2 trillion deep, and currently deepening by around €100bn a year). And that's perhaps the interest in Apple. Their tax avoidance doesn't result in more money in the real economy, it just flows into offshore accounts, to wait until the US government grant an amnesty on corporate cash repatriation (or to be frittered on non-US M&A).
Before the jokes start, British readers should note that our economy has very similar debt ratios and problems as Italy (huge public & private debt, tax avoidance & evasion, poor productivity, bloated public sector, red tape, corruption, and government policies (like energy) that are fresh from the mad house). One area of difference is that the Italian economy records a trade surplus (selling more than they buy internationally) to the average tune of around €30bn a year. The UK on the other hand remains mired in a trade deficit of £30n a year.
"Before the jokes start, British readers should note that our economy has very similar debt ratios and problems as Italy (huge public & private debt, tax avoidance & evasion, poor productivity, bloated public sector, red tape, corruption, and government policies (like energy) that are fresh from the mad house). One area of difference is that the Italian economy records a trade surplus (selling more than they buy internationally) to the average tune of around €30bn a year. The UK on the other hand remains mired in a trade deficit of £30n a year."
I'd like to also point out that the UK is #2 (behind Italy) in the length of time it takes to get payment out of business customers.
>furrin companies like BP
....it's a US company - after merger they kept the British HQ and brand name - ditching Amoco as it was synonymous with 'Cadiz'. The Amoco bit is most of it.......quite a cunning plan as it turned out - very few stateside realise the same company was responsible for both disasters....
The Italians are claiming that the profits in Ireland should be taxed in Italy.
They can claim this all they want. For EU law states that those profits should be taxed in Ireland at whatever rate Ireland decides to tax them.
It's simply nothing at all to do with the Italian tax system.
Mebbe it shouldn't be this way but it is.
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Apple will be investigated in Italy for allegedly owing almost £1bn to the Euro nation's taxman, it was claimed last night............ It's claimed Apple is accused of understating its Italian revenue to the tune of about €1bn, which works out to £840m or $1.35bn. According to anonymous legal system insiders, Milanese prosecutors will claim Apple failed to declare €206m in 2010 and €853m in 2011.
I don't understand - The way El Reg has reported this, it implies that the Italian rate of tax is ~100% of revenue.
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