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Apple Settles a $348M Fine With Italian Authorities For Tax Evasion (reuters.com)
jaromil writes: Apple Italy, a subsidiary of Apple Sales International based in Ireland, has for years managed the company's sales on the Italian Peninsula. As Italian tax authorities noticed the company did not file any income tax declarations between 2008 and 2013, they opened a court case for an estimated debt of €880M. Apple Italy has now settled for a fine of €318M ($348M), while three managers involved in the tax fraud still need to face court. "The settlement comes amid a European Commission investigation into the tax arrangements of numerous multinational companies accused of using cross-border structures to reduce their tax bills, sometimes with the help of secret and potentially illegal 'sweetheart' deals."
Tim Cook said Apple has never cheated on taxes anywhere, ever!!!! How could he say such a thing?
Now for the rest of the EU. And for Facebook, Google et al.
Religous speak to God. Insane are spoken to by God. When all shut up, one can finally hear Shostakovich in peace
The company's chief executive, Tim Cook, has rejected accusations that the firm has been sidestepping US taxes by stashing cash overseas, insisting: "We pay every tax dollar we owe."
Of course they do.
They lobby for preferential tax treatment for local and federal taxes. They use the law they and other powerful entities lobbied for to reduce or eliminate their tax bill. Then they can honestly say that they pay what they owe because they rigged the system so that they don't owe.
The Golden Rule: He who has the gold makes the rules - Robert Kiyosaki
We peons get holding the bag.
in America? Corps benefit handsomely from our infrastructure, school systems and workforce subsidies. I'd like to see them paying for some of those benefits, and so far Federally levied taxes are the only thing that works. The States & Cities just drop their pants and give 'em free money because their fighting amongst themselves (or their bought off, it's dirt cheap to buy off State Legislatures here).
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that apple cheats on taxes is not surprising, current apple is built on deception.
it charges for products well in excess of their costs( all costs, including design and development) and gets away with it due to marketing hype, and idiocy of the consumers, and failure of the media to check and reveal facts
Governments have an insatiable need for tax money, and yet they write the legislation filled with loopholes that the corporations exploit.
Level playing fields are important, but if you leave a legal way to avoid taxation in the code, most folks are going to take advantage of the exemption.
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
Apple doesn't pay taxes -- BAD Apple!! Oh wait... the new iPhone/Pod/Pad whatever is out and I'm going to stand in line to get one like a good little lemming.
like pets? definitely the flying ones are plenty dangerous enough? cease fire stand down, we're all even now...
All right, if these low-life motherfucking thugs swindled Italy out of €880M in taxes, why is Italy settling for a payment of only €318M? They obviously owe €880M, plus interest and penalties, plus criminal fines and imprisonment.
We all know where that money is going.
Like those done by the EU president Jean-Claude Juncker.
https://en.wikipedia.org/wiki/...
And people still want to stay in the EU who is also currently ignoring 3,000,000+ petition signatures and pushing TTIP, FML.
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Honest question: Will the TPP simply reverse this procedure, where the companies will sue to govern the government, and not the other way around?
Especially the Juncker part.
Look, I am an European at heart, and feel like crying when I watch those dirty folks (Juncker especially, but Schultz et al) destroying Europe.
No wonder all those horrible Europhobe political parties are having a big time now. Thanks, Juncker!
This is the guy who called Varoufakis a "traitor". Who is the traitor, setting up a tax haven in the middle of Europe, at our very cost?
If we want to get rid of Front National, Orban and KackzyÅski, we first have to get rid of Juncker and his ilk.
Since when do criminals get to negotiate their own fines? Especially at a rate which is lower than the estimated damages.
Apple is innocent!
where are the tech stories? And no, I do not own any apple products.
So the way I interpret this is that Apple will hang your ass out to dry when the time comes to pay the piper.
I mean really, Apple is an IRISH company? GTFOH for f's sake. Or maybe I should shout 'shenanigans!" instead?
http://www.nytimes.com/2012/04/29/business/apples-tax-strategy-aims-at-low-tax-states-and-nations.html?_r=0
The bright side is, with the brain dead, the body will stop flopping around soon enough, in my opinion.
Why not do it again?
This was a sweetheart deal for Apple.
The managers were probably well compensated for their risk too.
Italy should have collected the back taxes owned plus penalties.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
Tim Cook just did a fluff piece on 60 Minutes where he proclaimed Apple never does tax evasion. OK, so I guess chalk up another lie for another CEO who obviously is only concerned about the bottom line and stock holders. ^0 Minutes did themselves no credit by doing such a worthless infomercial piece as what they did with Apple. Truly a step in the gray area of investigative journalism.
It is not a fine. It is a settlement. That is, according to Apple they do not owe any taxes, Italy thinks Apple owes â880M, they agreed on â318.
It seems they both think this is about the best deal they would get if they let it go to court.
You don't like this ? Blame the lawmakers. The laws are apparently so complex and convoluted that calculating taxes owed is not straightforward making this kind of abhorrent situations possible.
Italy believes Apple was supposed to pay €880m in tax between 2008 and 2013, and Apple only had to pay €318m instead. If this report is accurate, Apple's tax evasion appears to have been handsomely rewarded. Perhaps Italy's estimate of taxes owed turned out to be wrong. Maybe. However, I suspect the tax authorities simply decided it was easier for them personally to just settle. The problem is that this creates a terrible precedent... and also robs their citizens of the services those taxes were supposed to fund. I'm no fan of big taxes, but each country gets to decide what taxes and services are appropriate. Other companies have now been told that it would be foolish to pay their taxes. If countries want to prevent tax evasion, they need to actually acquire all the back taxes owed, along with stiff penalties to discourage recurrence.
- David A. Wheeler (see my Secure Programming HOWTO)
The trick was: Apple is constrained by US laws restricting companies from engaging in bribery overseas. Since they couldn't bribe the tax officials: this was the least evil outcome?
Foreigners paying taxes to carry the dead weight all the free riders is a tradition in Italy. :P )
(Sort of like the Islamic State's "jizyah" for non-muslims.
It's a simple concept that multinational corporations use to minimize their tax burden. Is it illegal? No. Is is unethical? That depends. Let me explain:
Big Company has a factory in Country A, which has a corporate tax rate of 10%. It costs the company 10 currency to create 1 product here.
Big Company has a wholesaler in Country B, which has a corporate tax rate of 50%. Big Company sells 1 product for 50 currency here.
When Big Company does it's accounting, it has to declare it's profits in Country A and Country B. Obviously, it decides that it wants the majority of the profit declared in country A. How to do this?
Big Company creates product for 10 currency and sells it to it's wholesaler (which it owns) for 49 currency, so the profit in Country A is 39 currency taxed at 10%, or 3.9 in taxes. It then goes to Country B and sells the product to the consumer for 50 currency, making a profit of 1, taxed at 50% or 0.5 in taxes. The total taxes paid is 4.4 currency.
Is this unethical? It would seem to depend on if you are a citizen of Country A or Country B.
I'm sure Italy's tax bureau works much like the IRS. When the IRS thinks you have cheated on your taxes or you haven't filed returns, what they do is take your income and multiply it by the tax rate. No deductions are included and all penalties and interest are calculated on this amount. But if you begin negotiations to pay the bill with the IRS they will often let you file actual returns that included deductions. These deductions significantly reduce owed taxes. In addition on large negotiated settlements like this they will often waive the penalties and normalize the interest to the actual taxes owed.
Given those constraints it wouldn't be unusual for the 318 million euro's to be the actual taxes and interest that is owed. Penalties are there to force compliance, tax agencies rarely collect them when someone negotiates. And outside a court case where the plaintiff refuses to cooperate the tax agencies rarely take more than they are actually owed. Keep in mind interest rates since 2008 have been near zero so interest on the debt will be very small.
Once again illustrating the stupidity of corporate income taxes. All taxes should be levied at the level of consumption by the end consumer. Not their income, not their employer's income, etc, etc.
Italy was the Proof of Concept, given that Italy is the home of the parents of Alphonse Capone who ruled Chicago in the 1920s.
Cook's Irish Hoy-Filoy laundry now on display!
Ha ha