Mikey Campbell
Apple could potentially face trial in Italy after prosecutors there recently finished a probe into claims that the company's crafty accounting led to more than 879 million euros ($964 million) in unpaid corporate taxes.
Citing a pair of sources with knowledge of the inquiry, Reuters on Monday reported prosecutors completed their probe into Apple's tax practices and, under Italian law, may soon seek a trial over the matter.
At the investigation's heart are Apple accounting techniques that from 2008 to 2013 booked income to a subsidiary in Ireland rather than Italy. Specifically, two managers from Apple's Italian operations and one employee from Apple's Irish subsidiary Apple Sales International were under scrutiny.
If Apple had booked income with Italian tax authorities, its taxes would have been much higher. Overall, the company allegedly saved some $964 million using its Irish holding company.
For its part, Apple told the publication it is one of the largest tax payers in the world and has paid all required dues in full. The statement is seemingly taken verbatim from responses to media regarding other tax-related allegations, including an investigation from the European Union's antitrust commission.
"These new allegations against our employees are completely without merit and we're confident this process will reach the same conclusion," Apple said of the Italian probe's claims.
In 2013, government authorities seized equipment from Apple's regional headquarters in Milan as part of the investigation.
Back home, CEO Tim Cook in 2013 testified in front of a U.S. Senate subcommittee, saying "[Apple pays] of the taxes we owe — every single dollar. We not only comply with the laws, but we comply with the spirit of the laws."
Since the success of iPhone, Apple has faced increasingly rigorous standards from Italy's governing bodies, especially the Antitrust and Competition Authority. In 2011, Italy's antitrust authority fined the company $1.2 million for unfair commercial practices relating to AppleCare warranties. Following a relabeling of product packaging to fit Italy's laws, the body fined Apple another $264,000 in 2012 over similar transgressions. In addition, the Antitrust and Competition Authority conducted an investigation into "freemium" app sales last year.
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32 Comments
That's the same fracking italian justice system that
- Tried Knox 3 times for the same thing, taking the name of an avowed murderer with prints all over the room, as their "star" witness. In the third trial, they reused "evidence" from the first trial that had been thrown out as pure invention in the appeal!! The prosecutor in the first trial was basically fabricating evidence, yet still roams free!
- Had a judgement against geologists because they couldn't predict earthquakes
- Didn't prosecute Burloscony for decades because of influence peddling.
Italian justice is the pits, so I expect a conviction. They're very good at being a laughing stock of European law, and they will be up to that "challenge".
Greek or Italian; run social programs beyond means and when runs out of money than borrow or find rich company like Apple to blame and squeeze money like Mafia.
Apple and other large U.S. companies observe all tax laws in the foreign countries in which they operate. Italy is simply looking for free money.
I am actually surprised (should I be?) that AppleInsider failed to mention this from the Reuters article...
It said the Italian tax authorities had audited Apple's Italian operations in 2007, 2008 and 2009 and confirmed it was in full compliance with the OECD documentation and transparency requirements.
If Apple is being investigated from 2008 to 2013, then why are the 2008 and 2009 practices being investigated again since those years were previously confirmed to be in compliance?
It would be great if Apple could charge the Italian government with antagonistic practices would have the government paying a fine as well as Apple's legal bill. I can dream, eh?
Unfortunately, as more and more governments are strapped for cash, this will become commonplace.