Wed, 29 Sep 2021

Apple to pay up $347 for avoiding taxes in Italy

Calcutta News
31 Dec 2015, 04:02 GMT+10

MILAN - Apple's Italian subsidiary has reportedly been slapped with a 318 million euro ($347 million) bill for failing to pay tax in the country.

Authorities found disparities between the amount of money the Cupertino, California-based company brought in and the amount it handed over between 2008 and 2013.

In that five-year period, it's believed that the firm paid just 30 million euro ($33 million), much less than the 880 million euro ($961 million) it reportedly owed.

La Repubblica on Wednesday reported that the agreement follows a two-year investigation examining whether Apple's Italian subsidiary failed to declare some $1.3 billion of revenue to Italy's tax authorizes.

Prosecutors in the country accused Apple of moving the money from Italy to its subsidiary in Ireland, where it would get a lower tax rate. After months of negotiations, Apple has agreed to pay the full amount Italian authorities were seekinga figure that could reach as high as $350 million.

Apple's ability to make money so successfully has been questioned by several countries. Apple, and CEO Tim Cook, have both maintained that it pays every penny of tax that it owes.

The company signed a sweetheart deal with Ireland in order to base its European subsidiary in the country. The arrangement enabled the firm to get one of the lowest rates of corporation tax on the continent in exchange for creating jobs locally.

The European Union decided that the pact was illegal, and Ireland has been forced to eliminate the "double Irish" loophole that enabled firms to hide cash from authorities. Apple's current deal, for instance, will expire at some point before 2018.

Apple is also facing criticism on its home turf in the United States because of the so-called inversion deals, whereby a company redomiciles its tax base to another country.

US lawmakers are asking why Apple won't bring back some of its vast reserves to the US. Tim Cook has said that repatriating that money would incur a 35 percent levy. The CEO, along with others, has previously lobbied the US to either reduce that rate or to introduce a tax holiday as a one-off.

In an interview with CBS News' 60 Minutes programme, Cook said the real problem was with the high US taxes applied to repatriation of corporate profits.

"It would cost me 40 percent to bring it home and I don't think that's a reasonable thing to do.It should have been fixed many years ago. It's past time to get it done."

Apple is one of several companies, including Google and Amazon, to become the target of tax inquiries in Europe and beyond.

The European Commission has already ordered Dutch authorities to recover up to 30 million euro from US coffee chain Starbucks and Luxembourg to do the same with Fiat Chrysler for their tax deals.

Apple holds $181.1 billion in offshore profits, more than any other US company, and would owe an estimated $59.2 billion in taxes if it tried to bring the money back to the United States, a recent study based on SEC filings showed.

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