Apple Faces €1bn Italian Tax Probe
15 November 2013
Posted by: Author: Sarah McCabe
Author: Sarah McCabe (Irish independent)
APPLE issued a strenuous denial yesterday following
allegations that it booked some profits through its Irish subsidiary to
avoid paying tax in Italy. The technology giant is under investigation
in Italy for allegedly hiding €1bn from local tax authorities.
Milan prosecutors accuse the company of failing to declare €206m in
2010 and €853m in 2011 by booking profits through Irish subsidiary Apple
Sales International, which pays lower corporation tax.
pays every dollar and euro it owes in taxes and we are continuously
audited by governments around the world," an Apple spokesperson told the
Italian tax authorities already audited Apple Italy in 2007, 2008 and
2009 and confirmed that we were in full compliance with the OECD documentation and transparency requirements. We are confident the current review will reach the same conclusion."
development is the latest in a series of scandals that have erupted
around several multinational technology companies and the low taxes they
pay in Ireland.
A US Senate
investigation in May revealed that Apple has structured its operations
so that the vast majority of its non-US profits are reported in Ireland,
by companies which are not actually tax resident in this country.
subsidiary Apple Sales International deals mainly with Chinese
companies on the manufacture of iPads and iPhones, the Senate report
found. It then sells these products to another Irish company which
resells them to retail subsidiaries in Italy and other European
countries. The pricing of these transactions ensures that the lion's
share of profits end up with ASI. This works in part because Irish laws
allow companies to registered in Ireland – but be stateless for tax
Last month Finance Minister Michael Noonan promised to destroy this loophole.
me be crystal clear. Ireland wants to be part of the solution to this
global tax challenge, not part of the problem," he said, introducing the
The new rules will apply from January 2015.
The issue first came under the microscope earlier this year when US Senator Carl Levin branded Ireland a "tax haven".
The EU then launched a probe into multinational operations in Ireland, the Netherlands and Luxembourg to ascertain if the countries provided any 'sweetheart' deals to international corporations.
This article first appeared in independent.ie.