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Italy Investigates Apple For Alleged Tax Fraud
Frankie70 writes in with some more bad news for Apple in Europe. "U.S. tech giant Apple is under investigation in Italy for allegedly hiding 1 billion euros ($1.34 billion) from the local tax authority, two judicial sources with direct knowledge of the matter told Reuters. Milan prosecutors say Apple failed to declare to Italian tax authorities 206 million euros in 2010 and 853 million euros in 2011, one of the sources said, confirming a report by Italian magazine L'Espresso. The Italian subsidiary of Apple booked some of its profit through Irish-based subsidiary Apple Sales International (ASI), thus lowering its taxable income in Italy, the source said."
News at 11.
Expect to have your life ruined for underpaying or being overpaid by a few cents/pennies, though.
Capitalism: it always ends up like this.
Not the people to try tax evasion with...they are pros
Most of big corporations are infiltrated with criminals wearing executive suits. And I'm tired of excuses, "it's legal because our lobbying arm wrote the legislation and paid the right people to pass it"
Criminal is criminal! No matter how many laws are passed.
We all pay the price when money is constantly siphoned and siphoned to private corporations by governments sitting deeper and deeper in debt.
Apple just needs to register itself as a text exempt church to solve all this tax mess.
While despicable since megacorps like Apple have no defense for not paying what's owed as part of the cost of doing business, it remains to be said that the taxation system worldwide is completely out of control. No percentage will ever be enough for any government and thus tax paying entities must find techniques to minimize the fleecing.
I suspect the hottest question around Apple today is "who forgot to pay the Parliament's members bribes?" (or, at least, make the appropriate "campaign contributions", as we prefer to call them here in the USofA).
The Italian's main complaint was Apple weren't dodging taxes enough and making the mob run companies look bad.
I want a list of atrocities done in your name - Recoil
They do business in Italy. They get money in Italy. They pay Apple (Eire) an extremely uncomptetitive rate for the "rights" to use their own frigging products in Italy so that they make no profit off massive revenue.
It's absolutely no different from Hollywood Accounting.
And it IS tax evasion.
If a private corporation cannot make 3% ROI, then it's a failure. Since so many multinationals manage to wrange a way to a NEGATIVE return on investment, then how the hell is this fatuous meme "The private industry can be profitable, the government can only run things into the ground" created?
Because they're avoiding taxes by tricks.
They have two options
1) they are incompetent, in which case they should be closed down by shareholders for incompetent management and all C*O pay should be slashed because so few manage to make any profit for the company.
2) they are illegally evading taxes but are otherwise actually competent at business
Paying for the stuff being done is a "magic number that equals Enough for the taxing authority".
Morover, when the subject is executive compensation, you're all about how it's allowed that they can just be given as much as they can get away with because "you can't put a limit on what someone earns".
Yet when it comes to government, somehow, there's a magic number that they cannot spend above and must be limited.
Hell of a double standard you've got there.
Even when you quoted it, your follow up was nothing to do with that which you quoted, indicating that all you can do is write, never read.
Saddam Hussein did not illegally have Kurds killed. He made it legally right to do so.
Yet somehow in this case what the legal law said was irrelevant because the one breaking the law that should be there was writing the laws.
In this case, the only difference being you worship corporate criminality because you have a chance of gorging at the trough, whereas you weren't getting your beak wet in Iraq.
A crisply-produced short commercial of a Three Card Monte game involving Dollars, Pounds, and Euros backed by a jaunty piano soundtrack.
Apple. Steal Different.
These things have been going on since forever and it has always been a well-known secret. But as times get increasingly desperate, governments and banks get increasingly worse about trying to squeeze money through taxes and fees respectively.
But this is how you know when things are about to turn bad. Just as with the 2008 collapse, weird things were going on with banks. "Economists" on the news would stand up there claiming everything is doing well and that anyone who says different is a nut job. And what did I read the other day? Something about letting banks, once again, repackage risky debt into commodities again? We know that's a huge part of what went wrong in the first place. So why do it again? They know the end is close and they are just trying to get their last bit before things shut down finally.
Yeah, I know... all doom and gloom. But just because the truth tastes bad doesn't mean it's not the truth. We've seen it before. We saw what they did. We see they want to do it again. What does anyone THINK is going to happen?
Technically it's tax avoidance, which is immoral but not illegal.
Every large corporation does it, and there are tons of lawyers and tax consultants who specialise in exactly this kind of stuff.
It's probably the largest organized crime in the history of mankind, except that through lobbying or sometimes outright bribery, it's actually legal. Well, it's borderline legal, and you get cases like this every time a tax consultant became a tad too creative and crossed the line.
But it's theft, plain an simple, and every idiot who cheers the corporations should hold it for a second and think about who is going to pay for the missing taxes. Yes, that's right, same idiot. If you wonder why your taxes have been increasing, it's because corporate taxes are dropping. If not on paper (though in many countries there as well) than in reality through tax evasion.
Assorted stuff I do sometimes: Lemuria.org
They don't explain the nature of the tax dispute in any detail in the article. What they do say makes it sound like the source of the dispute is that people are ordering Apple products in Italy and the orders are being fulfilled by their subsidiary in Ireland. So the profits are getting booked in Ireland vs. Italy because that is the unit that made the sale. It goes on to say that there is a proposal by the government of Italy to force any company that advertises in and sells online in Italy to do its order fulfillment via "agencies with a tax presence in Italy". I am somewhat sympathetic to countries trying to capture tax revenues from business in their countries. I am far less sympathetic to the idea that they are going to place local presence requirements in order to do online business in Italy. If every country did that it would pretty much end international online sales for anything but the largest companies. Places like Apple and Amazon who can afford, and indeed probably already have, local presence or partners. It will totally screw smaller Internet based merchants that don't have such a presence.
technically whenever justices wish using loopholes that go clearly against intent of the law is illegal, turning tax avoidance into tax evasion.
Apple not paying its share. Oh the humanity of it all! I just wonder when people will finally go to those Apple anonymous meetings and get off the Apple juice.
It's absolutely no different from Hollywood Accounting. . . Because they're avoiding taxes by tricks.
Um, that's a contradiction. Corporations like Apple pay less in taxes because they can find loopholes. That's very different than a corporation basically lying to their creditors about how much money they made. I suspect that the Italian government, because it is desperate for money, are now going after practices that they've allowed for years even though tax laws have not changed.
In crisis-hit Italy, tax authorities faced with dwindling revenues have become more aggressive with domestic and multinational companies.
They have two options
Or they can wait until the audit is over and Italy finds that they did nothing wrong.
Well, there's spam egg sausage and spam, that's not got much spam in it.
there's no issue about where the sales are made actually in this.
what they have done is artificially move the on-paper profits to the ireland based entity - which is owned by the same people. sales are done in italy, but they're claiming that they make no profit from the sales in italy because they (on paper only, mind you, it's not like they're actually ferrying the shit through ireland) buy the devices at retail price from the another entity in the business which is based in ireland.
why is it important to squash this practice eventually? well doh, there wouldn't be any taxes to be paid on any corporate profits stemming from sales anywhere else than ireland in europe if they don't do something about it(the alternative is in practicality to raise VAT so that all corporate profits taxing comes from VAT... which might not be that bad of an idea, alternatively force ireland to change it's laws to stop acting as a tax haven stopgap for this purpose)..
"ASI contracts with mainly Chinese companies to manufacture iPads and iPhones. ASI then sells these products to another Irish company which resells them to retail subsidiaries in Italy and other European countries.
The pricing of the inter-company transactions ensures that the lion's share of the profit ends up with ASI, the Senate report said. Low profits in countries like Italy mean low tax payments there."
world was created 5 seconds before this post as it is.
Well in this case, apparently not.
I think that's precisely why Apple is being investigated here, what's mere avoidance in other countries sounds like it may well be evasion in Italy.
They do business in Ireland and they sell to customers in Italy. The whole point of the EU is it's a single market, that means, you can establish your company once and sell to everyone within that market. If you set up in Ireland and sell to Italians, not only is that not tax evasion, that is the point of the EU in the first place!
These companies have all had exactly the same tax arrangements for years and as Apple point's out in the article, have been repeatedly audited and passed. In fact Italy appears to have audited Apple three years in a row, which seems only explainable as harassment - tax audits are supposed to be semi-random spot checks to ensure compliance. If you pass an audit, getting audited the next year is just a waste of time and money for all concerned.
What's happening now is that a lot of governments around the world, having spent many decades promoting trade and economic integration when times were good and they had excessively cheap credit, now decided that maybe free trade isn't such a hot idea after all. After all, it might mean that other countries who you trade with end up more appealing to do business in. Ireland has had a long-standing policy of aggressively attracting international businesses with low tax rates, it's a very popular policy amongst the people in Ireland, and in fact until their government foolishly panicked and committed to a full bailout of their banks their economy was doing great. If the Italians are now mad about it, they have two choices:
1) Start rolling back the EU single market, then they can pass rules that say "if you want to sell stuff to Italians, you must run your business out of Italy and pay whatever taxes we want to do that" (of course this means some companies won't bother)
2) Deal with it and find other sources of revenue, whilst enjoying the fact that when Italian companies sell to the Irish, the Italians get to keep the corporate tax from that.
Right now governments are trying to do both simultaneously, which is why they grind to a halt in an internal deadlock of contradictions and you get bizarre setups like companies buying things from themselves.
Apple specifically will "solve itself" after a while because probably, Ireland will start making them corporation tax in Ireland safe in the knowledge that it's still more appealing than the alternatives. However this will not satisfy other members of the EU who dislike tax competition.
By the way, your post is very emotional. Tax should not be an emotional topic. Tax is (or rather should be) a technical matter in which people analyze the most efficient ways to raise the revenues governments need to function. Whether corporation tax is even a good idea at all is a matter of some debate in academic circles - the fact that you're trying to tax an entity that doesn't actually have any specific physical location is one reason why everyone ends up feeling like it's "not fair".
By some reason, I came across a writing on a Dutch Apple store website in which it says that VAT on software is 23%. Knowing that the VAT in the Netherlands is 21%, I read the disclaimer and the tax is 23% to all services. The services include software and once purchased, sw is "shipped" from Ireland. Maybe the Dutch have arranged it differently. I am not sure if Dutch Apple subsidiary is paying taxes to Dutch or Irish state, since the below statement does not clarify that: Excerpt from http://store.apple.com/nl/help/payments "Voor klanten van Apple die in de Apple Store elektronische softwaredownloads bestellen of andere producten die worden aangemerkt als diensten, geldt een btw-tarief van 23%. Elektronische softwaredownloads worden beschouwd als dienstverlening, en niet als product. Aangezien de dienst wordt geleverd vanuit Ierland, geldt een btw-tarief van 23%." translated: "For Apple customers who order from the Apple Store Electronic Software Downloads or other products classified as services, applies a VAT rate of 23%. Electronic software downloads are considered as services, and not as a product. Since the service is supplied from Ireland, a VAT rate of 23% applies."
Technically it's tax avoidance
Avoidance is a synonym for evasion. A distinction without a difference whether it is legal or not. They might be obeying the letter of the law but it is tax evasion nonetheless.
The Irish economy was not doing great before the bailout. The fact that they couldn't raise interest rates burnt them badly when their economy overheated.
All big American companies do that in Europe, Micro$oft is another bright example.
They open a subsidiary in the European country with the lowest taxes (namely Ireland) and make business in whole Europe.
Sometimes they get caught because they don't clean up properly.
And this is why Apple is in Italy even though it's based in Ireland.
Not the people to mess around with, indeed.
Back in the 80's, I was riding with a friend in Sicily... the GF unit that stopped us to check that the appropriate tax stamps were on licenses, registration, etc., were openly carrying fully automatic submachine guns....
Corporations like Apple pay less in taxes because they can find loopholes.
We call them loopholes specifically because they present a way to do a run around the intent of the law. Simply by speaking English correctly you have doomed your own argument.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
I'd be extremely surprised if it was Tax Evasion as Apple has very competent lawyers and accountants and the methods employed are clearly legal according to the laws as they stand. If Italy changes their laws to make the Double Irish illegal & Apple still tried to tunnel their profits out of Italy using it, then it would be illegal.
Every single state in the EU has refused to outlaw the strategy Apple, Google, Starbucks, etc are using because unless they all change at the same time, the countries that outlaw it would be at a competitive disadvantage. EU politicians need to grow some stones and work out a plan for outlawing the practice globally in the EU or stop whining when the laws they write are followed as they are written.
Democracy is a sheep and two wolves deciding what to have for lunch. Freedom is a well armed sheep contesting the issue
So you are an expert on Italian law? It is a common trick used by many companies but it is illegal in most places. The hard part for the local tax offices though is to prove the internal pricing between Apple offices is fraudulent.
Ha-ha. Who do you think pays the money to the corporations that they then hand it to the government?
You are talking about tax incidence.
Corporate taxes are just a way to tax more money from 'the people' while getting idiots like yourself to cheer it on.
In many cases you are quite correct but that logic falls apart somewhat (though not completely) when you are talking about large multi-nationals where the company owners might not be citizens of the taxing country. The mere fact that Apple is headquartered in the US means relatively little by itself. Apple really is a bunch of companies under an umbrella company. Figuring out just how profitable the Italian subsidiary of Apple happens to be is a shockingly imprecise exercise that gets into all kinds of transfer pricing and other arcane accounting prone to fudging even by well intentioned people. (I'm a certified accountant so I ought to know) So owning a piece of a multinational can end up being a tax evasion strategy (by keeping the money in the company) unless you tax the corporation directly in certain cases.
Off with their heads!
Spent All My Mod Points
It is closer than you think. Neither case is about lying.
In Apple’s case they are shifting the profit (and thus taxes) from Italy to Ireland. Is Apple doing this to boost profits? Yes. Is there a large amount of subjectivity in meshing Irish and Italian tax codes together? Yes. Should a country be able to structure its tax code to boost growth? Yes.
In Hollywood they shift revenue (and thus payouts) from the movie to the production and distribution companies. I have a lower regard for Hollywood accounting because the movie, production, and distribution companies are all controlled by the same group of people and is a example of self-dealing but that is a different story.
Well in this case, apparently not.
I think that's precisely why Apple is being investigated here, what's mere avoidance in other countries sounds like it may well be evasion in Italy.
that's exactly the case. the judiciary in Italy have given an enormously lax interpretation of abuse of law, to the extent that it is in the sole and retrospective interpretation of the tax authorities to say what the law actually intended years ago. Mind you, that leads to byzantine tax laws, since the legislator has no interest whatsoever to do it right the first time.
"If a boss demands loyalty, give him integrity. But if he demands integrity, give him loyalty." (John Boyd, 1927-1997)
From OP: "Apple pays every dollar and euro it owes in taxes and we are continuously audited by governments around the world," the company said in a statement.
BULL*cough*SHIT:
Where do multinationals pay taxes and how much? Spoiler: nowhere, anything.
Here's how 99% of Wall Street gets away with effectively paying 0%: https://www.youtube.com/watch?v=d4o13isDdfY - The Tax Free Tour (VPRO, Marije Meerman, 1h docu)
Anyone with a positive IQ know what is going on and in the current form it's legal.
What the prosecution hopes is to find an error somewhere and make them pay a fine.
They are tackling global tax avoidance in the most stupid way and it's not an Apple problem, any company that earns enough pays income taxes only if they want.
Love many, trust a few, do harm to none.
Sorta.
Read this (set aside about 2-4 hours to do it)
http://steshaw.org/economics-in-one-lesson/contents.html
Now realize this. Different govs are all trying to game the system. They are trying to create equality amongst the people. You will see things like "fair" "not taxed enough" etc...
What this book demonstrates is that all of these feel good programs end up doing pretty much the opposite of what they set out to do.
For example right now we have our interest rates near 0 (like we did in the 60s). You can not beat the market. It *will* come back the other way. We already have high commodities inflation (hidden by the fact they do not measure it anymore, my guess about 20-30% in the past 8-10 years). We will have high interest rates in the future. Count on it. Sorry bit OT.
Anyway, given that the governments are gaming the system. It stands to reason that individuals and corporations could game it as well. Especially companies like Google and Apple who have very smart people working for them. Exploiting loopholes for their advantage. In this case instead of wealth coming back to the 'owner' it gets funneled somewhere else to hide it from taxes. Which means it sits in a bank somewhere or is invested somewhere. Now banks being lenders of money lend out that money or it is already directly invested.
So instead of thinking those awful corps 'stealing' money. They are basically creating more jobs with that money than any gov ever will. They just are not creating the jobs here. It will happen wherever the money gets parked at and loaned back out and have the resources to use that loaned money.
Perhaps we should address our awful tax policies? What makes a corp want to keep its money on the other side of the world? Creating Rube Goldberg like corporate structures whos only lot in life are to hide money and not create wealth. Why is this happening? Poor tax structures with high rates of confiscation if you do not game the system. For example lets say Apple made 1 billion dollars. Then decided to bring it all home. They would pay 350million dollars in taxes. Money that many argue is being spent on pointless wars and "standard of life" programs.
This does not surprise me in the least.
Yes, they were doing pretty great, so great that the name "Celtic Tiger" was invented specifically to describe the Irish economy.
Like most economies that have inflationary currencies, this led to exuberance and dumping of money into a housing bubble, on the theory that whilst money inflates away houses don't. Being in the Euro had nothing to do with this, it's a disease that affected the USA and the UK as well, even though they have their own currencies and central banks. In fact these governments (but especially the UK) were all desperately trying to push people into the housing bubble due a massive and misguided social engineering program rooted in the belief that home-ownership is an end rather than a means.
But this is not specific to Ireland. It's actually a problem fundamental to an environment with compound inflation (recall that at 2% per year, prices go up every year by more than the previous year because inflation is expressed as a percentage rise on the previous year, not a fixed reference point).
Quoting the wikipedia article I linked:
So they went from one of the poorest countries in Europe to being equal to some of the best in only a couple of decades, and a big chunk of that was due to low corporation tax (but not necessarily low taxes in general, mind you) combined with access to the single market.
The Irish people love their low corporation taxes and did not really raise them even during the global recession, because they have attracted tons of very high-skilled jobs from well known, rich corporations - companies like Apple, Google, Intel and others. The latter two alone created tens of thousands of jobs, which in a small country is a Big Deal, and they're far from the only ones. So not surprisingly, a policy that has created a spigot of good local jobs is popular - a government with higher tax revenues but that spends it all on welfare is not obviously a better state to be in.
This isn't necessarily a strategy that can be replicated everywhere: Ireland was catching up from behind during its boom years, not accelerating ahead of all the other countries. And some of its appeal to international companies was the fact that it wasn't very rich, so wages weren't extremely high. But there are other parts of Europe that are now also behind (think: Spain, Portugal, northern England), so perhaps they can consider whether the same strategy would help.
Some will say this leads to a race to the bottom, and there's some truth to that, but the question is does it matter? It's not like taxing corporations is the only way to raise revenue. Indeed, if you trace a money flow, you'll see that when someone buys something, there's sales tax/VAT paid on that. Then (ignoring the case where the money is sent back to HQ abroad for a moment), it's booked as profit and tax is paid on that too, and then the company pays its wages and possibly pays employment taxes as part of that, and of course property taxes for the place where the employees work, the employee pays income taxes on their wages as well, and in some places also pays a wealth tax at the end. So by the time the money has flowed from one person to another (which is what we really care about, given that economies are ultimately made of and in service of people), it's been taxed many times repeatedl
Gassing Jews? legal.
Being a colony of the British Empire and taxed unequally? Legal.
Yet somehow merely being legal isn't enough: these actions were wrong, despite being legal.
Moreover, if something being legal were the end of the matter, then you would not need juries: just read the law.
And a lot of eu states are not happy with the way Ireland behaves over this - I suspect that a quick cut to the CAP (farm) subsidy and removing it from the list of "poor" countrys that get EU infrastructure funds would bring Ireland into line.
Well, since that executive compensation came from the people who pay taxes and buy stuff with what's left over, how does that make the government grabbing as much as it spends wrong and CEOs doing the same fine?
Answer: it doesn't.
And if it doesn't negate the point that governments raise taxes constantly (which is 100% false) why does that make CEO compensation growing constantly (in fact, as opposed to fiction) and VASTLY FASTER than taxes have EVER grown right?
Answer: it doesn't.
(insert here any, and I mean abso-lu-freakin'-any government spending level, borrowing level, or political narrative blasted over speakers to masses who help you take power by the abstraction of might makes right called The Vote) and those guys over there need to pay their fair share!
Take a bigger percent. Repeat again next year.
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
Should a country be able to structure its tax code to boost growth?
No.
All it said was a hand-washy "certain things".
WHAT things?
WHY?
HOW?
Nothing said on that, just a "certain things" for which we're supposed to work out both what they are and how they apply.
This isn't any form whatsoever of an argument, merely an avoidance of one.
From my understanding Hollywood accounting categories costs for items that are not costs or calculates costs based on formulas rather than actual numbers. The thing with Hollywood accounting is that it hasn't ever passed legal muster. The companies do everything in their power to avoid this or even to disclose details. Legal loopholes like the ones Apple and Google use are actually codified. Although Ireland has issues with what Apple did, it was perfectly legal. Ireland has to change their laws to avoid it.
Well, there's spam egg sausage and spam, that's not got much spam in it.
Yes but requires them to actually change their tax codes. In this case it seems Italy wants to disallow practices they have allowed in the past without having to change anything in their codes.
Well, there's spam egg sausage and spam, that's not got much spam in it.
Technically it's tax avoidance, which is immoral but not illegal.
Given what most governments do with the money, it doesn't seem at all immoral to withhold as much as possible from them (especially the Italian government).
Remember that your tax dollars are funding the NSA.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
you get a vicious circle where a small group ends up looting the entire economy,
You should really try traveling more. Because from a lot of travels in Europe and Africa, even the poor in the U.S. have quite a good lifestyle.
How is it looting when everyone benefits?
"There is more worth loving than we have strength to love." - Brian Jay Stanley
If you actually read above you'd see that's not the crux of argument. Is a corporation lying about their accounting and keep secret their methods the same as a corporation following the rules of law in lowering their taxes? Since Hollywood accounting has never been definitively declared in a court as legal or not, that defeats your limited understanding of the nuance. Is my English clear enough for you?
Well, there's spam egg sausage and spam, that's not got much spam in it.
The EU is already working on a fix. The plan is to make any company that does business in the EU pay tax proportionate to the amount of business it does in each member state, regardless of where it is based or how much money it claims to be losing due to nonsense licensing fees etc. You do business here, you pay, simple as that.
Naturally the Irish and UK governments are against it, but seems likely they won't be able to stop it happening.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
The whole point of the EU is it's a single market, that means, you can establish your company once and sell to everyone within that market.
Except that Apple does have an Italian corporation that runs its stores there, provides tech support, advertising, manages the local business and so forth. That company just doesn't make any profit because it has to pay crippling licensing fees to Apple Ireland, a shell company. Strangely though it doesn't go out of business despite these losses.
The Italians quite correctly recognize this arrangement as bullshit, a silly tax dodging scheme designed to prevent an Italian company paying its fair share of tax.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
And it's the main reason why many countries have a common law system.
Where actual case law clarifies the law without having to change the wording of the law.
Apparently you want them to change their legal system without changing their legal system's procedures.
O.K. – I will bite. If Ireland can’t structure its tax code and shouldn’t determine how their economy should run, who should? And if the answer is Italy, does that mean Argentina gets to run Italy’s revenue service?
Technically it's tax avoidance, which is immoral but not illegal.
I would say that not paying taxes to /any/ government is the most moral thing a man can do.
Technically it's tax avoidance, which is immoral but not illegal.
That used to be the case - but a lot of countries over here have suddenly discovered they are stoney-broke and that the amount of tax lost from technically legal 'avoidance' is a damn good chunk of the money they are 'missing'.
So now some of them are busily re-defining and rewriting legislation to make it both immoral and illegal - as it always should have been.
However, they will of course leave in some 'accidental' loop-holes for themselves to abuse and the whole cycle will start again, changing absolutely fuck all... but oh well :)
Failing to starve the beast is immoral. Tax avoidance is not only moral, it's an imperative.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
Italy actually still cares about the spirit/intent of the law apparently. Something blatantly done to get around paying a proper percentage of taxes from their standpoint should be punishable.
When it comes to tax law I don't agree with this, because governments waste/funnel taxes en masse a la the NSA comment above. However there are many instances in the US justice system where a "technicality" or "loophole" was the definitive argument in a case. At some point we went from valuing the letter of the law over the spirit of the law, and it's a really bad idea.
It wastes judicial resources, it can be used for selective prosecution (they only prosecute the technicality in certain cases since it's obscure), and because of it innocent people go to jail. Further blatantly guilty people are able to walk free because they spent millions on a legal team. We in the US (sorry if you aren't from here and this offends you) no longer trust officials to actually make a judgement is the root of the matter, and clearly Italy still does.
It's not some secret that Apple has been doing this for years. Many other companies like Google do the same. And Italy was fine with it as Apple passed audits for many years. Now Italy thinks differently because they are facing financial crisis. If Italy cared all along, they didn't care enough to address it earlier.
From what I know of the Italian government, judgment changes based on whoever is in power at the moment. The shed I built last year was up to code. New government, new judgment --> now I have to pay for a "permit" because the local government wants more money. Should that be allowed?
Well, there's spam egg sausage and spam, that's not got much spam in it.
Whether corporation tax is even a good idea at all is a matter of some debate in academic circles - the fact that you're trying to tax an entity that doesn't actually have any specific physical location is one reason why everyone ends up feeling like it's "not fair".
Well they receive protection from law enforcement and enjoy the privilege of appeal to the courts, separately from the individuals who own interest in the corporation, so why should they not pay taxes?
Well in this case, apparently not.
I think that's precisely why Apple is being investigated here, what's mere avoidance in other countries sounds like it may well be evasion in Italy.
RTFA - they did the same investigation the last couple of years and nothing came of it. This is nothing but the Italian government trying to give the Italians the impression they are trying to balance the budget by getting money from the evil Americans. Hey, and it even works in the US.
Of course news about a fake are Fake News.
It's bad but not that bad.
What I think you are referring to is the expense accounting of capital interest charges, depreciation of intangibles, etc. These areas are actually codified. Except the code did not expect such a creative / aggressive approach.
For example, if it takes me 3 years to build a skyscraper I can take the interest that I was charged on the construction loan, capitalize it, roll into the costs basis of the building and depreciate over the life of the building - 30 years. That’s legit.
If it takes me 3 years to produce a movie, (from a mere idea to being on the silver screen), can I capitalize my costs and depreciate them over the life of the movie - 50 years? I would say no, but.
As a person, that sort of thing is a problem. As an international corporation, you have choices as to where you do business.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
With so many posts below you, I don't know if you will read my comment. But if you do, I'd want your opinion about this.
If Americans living overseas are subject to American income tax, and if corporations are people, then should corporations be able to avoid paying American income tax when they move overseas? Or should they be subject to it like flesh-and-blood people?
I would propose that any business born in the USA should be subject to income tax even if they move overseas, for a period not less than 10 years. Of course, out of fairness, the rate should be adjusted. So if in that foreign country they're paying X%, and they'd normally be subject to Y% in the USA, they'd have to pay (Y-X)% in the USA. Or something like that.
Corporations like Apple pay less in taxes because they can find loopholes.
We call them loopholes specifically because they present a way to do a run around the intent of the law. Simply by speaking English correctly you have doomed your own argument.
Laws aren't defined by "intent" but by the words they are written in. If the lawmakers fuck up, it's their fault.
Of course news about a fake are Fake News.
In the EU as a company, you are allowed to declare the EU country to base taxes. Apple chose Ireland. This was supposed to be one of the benefits of the EU. Companies would no longer have to tangle with each EU country's tax codes, but just one. After the financial crisis, Italy wants more money and have tried for years to audit Apple in getting more revenue, but Apple has passed each year. At best, Ireland might get more taxes from Apple, not Italy. So Italy either has to change their tax codes (which would irk all other EU companies) or find other means.
Well, there's spam egg sausage and spam, that's not got much spam in it.
Hollywood accounting is more complex at the macroscopic and microscopic level. Many studios create subsidiaries which "made" the movie. The parent company collects revenue from ticket sales, licensing, etc. The subsidiary charges the parent company the cost of the movie. Often the cost is the same amount as revenue. At the microscopic level, these subsidiaries charge exorbitant rates. For example, the cost of set location is not what it cost to truly build and maintain that set. Personnel are also charged extremely high rates. Salaried personnel are charge many times their salary when split over many movies. If it were a normal business arrangement, the client would balk if they paid $40,000 for an assistant for a month's work ($480,000/yr for an assistant who is paid $30,000/yr in salary). But the client is the parent company so the parent's overall bottom line isn't affected. But per film, the studio lost money.
Well, there's spam egg sausage and spam, that's not got much spam in it.