Cash-starved Italy claims Apple owes them €1 billion in taxes, Apple says figgetaboudit

Italy claims Apple owes them €1 billion in back taxes, Apple begs to differ

Italian authorities are claiming that Apple owes them money - namely €1 billion in taxes - and they want to collect. Apple, of course, says no way. Manuela D'Alessandro, writing for Reuters:

Apple pays every dollar and euro it owes in taxes and we are continuously audited by governments around the world. 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.

Everyone wants to get more money, everyone wants to keep more money. Pretty much the oldest argument in history. Italy in particular needs euros and needs them badly, and Apple is a big, rich target.

Will Italian auditors find more money to tax? Will Apple prove their compliance? Something in between? Check out the article and then do your best "internet accountant" impression in the comments.

Source: Reuters

Rene Ritchie

Editor-in-Chief of iMore, co-host of Iterate, Debug, ZEN and TECH, MacBreak Weekly. Cook, grappler, photon wrangler. Follow him on Twitter,, Google+.

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There are 28 comments. Add yours.

svfd757 says:

This sounds pretty scetchey. I am certain a company the size of Apple has many many people who due their due diligence, especially when it comes to government stuff. Try someone else Italy!

Carioca32 says:

iMore seems to be taking a very imparcial view of the subject, eh?

Italy claims Apple, like many other companies including Amazon, declares some of its profits - made in Italy - in Ireland to avoid paying taxes. Is the italian government so wrong in pursuing those taxes? Does it really warrant the sarcasm presented here? Just by reading iMore's piece we're left to believe Apple has an unshakeable moral high ground, which does not seem to be the case.

pappy53 says:

I am an Apple fan, but I agree with you on this.

Solamar says:

Based on what do you make that conclusion? Italy's? A place full of corrupt bureaucrats? Thats like the pot calling the kettle black. They've been getting a ton of flack from locals .. turning to international businesses is much more politically correct.. no hangings that way.

Also, it is the high ground because they are constantly audited and any discrepancies are corrected at that time. Are you saying that Italy just 'overlooked' all that money in 2009-now in their audits? Eh, right.. I've a chicken farm full of roosters to sell you too. Trust me, you'll get lots of eggs.

Carioca32 says:

You clearly did not read the Reuters piece and is just having the usual knee-jerk reaction to Apple criticism. Italy is not questioning 2007, 2008 or 2009 taxes. It wants 2010 and 2011 taxes, that's where the problem is. Read the original piece first, and then return to defend Apple.

MikhailT says:

Except two things:

1. It is well known that Italy is one of the worst corrupted governments on the planet. Just look at their last election and who they were voting for. They're the one who got themselves into a bad shape.
2. None of those companies are doing anything illegal, they're all taking advantages of the same loophole in all local laws and international laws. Yes, it is unethical, immoral and just not fair but it is not illegal.

US didn't find them breaking the laws, the UK didn't, and it is very unlikely Apple did it in Italy for that huge amount.

Italy claims Apple didn't inform them about 1.1 billion euros they made for profit in both 2010 and 2011, which somehow turns into 1.3 billion euro taxes.

If the governments like Italy wants Apple to pay a fair share, then they have to apply it to every company in the country, both domestic and international. They have to change the laws to close those loopholes, period.

If Apple worked around the laws, that's a different thing but if they took advantage of the same loopholes that other companies are doing, that's just smart business thing, regardless of the ethnics and morality of doing so. They're businesses to make money, nothing more and nothing less.

In addition, Apple's been audited by Italy several times and were never found guilty of anything, thus Apple do hold the high ground here.

Carioca32 says:

Italy is applying the law to all companies, including Apple. iMore singled out Apple because its an Apple blog, but the original piece mentions Amazon as well.

I'm not a tax attorney, and I very much doubt you're one either, but what Italy claims is that companies are selling products in italian soil and declaring the profits from those sales in Ireland. If that's legal or illegal, that's for the courts to decide.

Are you quite sure the Italian goverment is any more corrupt than any other?

MikhailT says:

I read the original source article at Reuters again, nothing about Google nor Amazon getting hit.

The only mention is this:

> The maker of the iPhone is the latest prominent corporation to become the target of a tax inquiry in Italy amid a global crackdown aimed at preventing companies such as Google, Amazon and others from avoiding taxes.

That's just a generalized statement, it did not say that Google nor Amazon was also targeted *yet*.

> I'm not a tax attorney, and I very much doubt you're one either, but what Italy claims is that companies are selling products in italian soil and declaring the profits from those sales in Ireland. If that's legal or illegal, that's for the courts to decide.

And they've done that back in 2007, 2008, 2009 and Apple wasn't found guilty. Apple haven't changed anything in the last decade, they've always been doing this same tax system with the Irish. They confirmed this when they were in front of the congress.

The only thing that Italy is claiming is that Apple did not disclose the tax properly in 2010 and 2011.

There is no way that Apple sold enough stuff in Italy for two years to own 1 billion in euros.

I think the media got this wrong, and that Italy is saying Apple sold 1.3 billion worth of products and they own taxes on it.

If that is true, then Apple'd own at most 100-300 million of taxes, and that's already the highest tax rate.

Carioca32 says:

By your estimation, but we don't have the actual figures or penalties that may apply by Italian law. I'm not saying Apple is wrong, I'm just saying Italy has the right to pursue this and take it to the courts, and it should not be the butt of the joke for doing so. Nobody cried corruption when the US asked the same questions.

AdamChew says:

Strange all of a sudden I find you changing tack that Apple is not wrong.

Nice try anyway.

imoredaddy says:

Hey dumski, look at Apple's track record when it comes to paying taxes in every other country it does business. Do you think Apple would just not pay them in Italy? Look at the whole picture and not just what is printed here. Expand your mind; knowledge is power, son!

Carioca32 says:

Did you even bother to read the original piece or are you just defending Apple out of habit? What track record, do you know of every tax return Apple has ever filed abroad? This accusation in fact is not new, Apple has faced it in the US itself a few months back and Tim Cook had to testify before a US congress commitee.

Expand your mind; knowledge is power, son!

imoredaddy says:

Ok. First let me answer your two questions. Yes, I did read the article. But because I'm commenting on an Apple blog, I'm not referring to the other companies. Second, no I have not seen all of Apple's tax returns, and I will assume you haven't either.

With that being said, I am a tax attorney for the US government. I know that Apple operates in 14 countries and gets audited in at least five of them on an annual basis. In law school, you learn about "non-verifiable trust" when dealing with clients. Apple paid taxes in every other country they operate in. Also, Apple was not called before Congress because they were suspected of tax fraud or evasion. It was a mutually agreed upon hearing about how to free up off-shore income for transfer back to US banks. Yes I did listen to the entire hearing.

As for the mafioso comment, obviously I was using hubris when I stated that.

Carioca32 says:

"It was a mutually agreed upon hearing about how to free up off-shore income for transfer back to US banks"

Seriously, isn't than a legal euphemism for "accused of tax evasion"? In the words of John McCain "In my view, Apple has violated at least the spirit of the law, if not the letter of the law."

AdamChew says:

I beg you can dig up more of these wise sayings to impugn Apple.

johncblandii says:

"Apple has an unshakeable moral high ground" was proven wrong with their eBook actions [forcing publishers to play with them by blocking their apps, etc]. They definitely are upstanding but, as Rene always says (in my words), we shouldn't trust a for-profit company.

AdamChew says:

You are hilarious with your facts, er lies,

johncblandii says:

Name one lie I stated in that comment.

I'll wait.

techconc says:

Given the fact that previous audits have turned up nothing in Italy and given that even the US government wanted to find something illegal with Apple's tax practices - but couldn't... it seems that the tone of this article is spot on. Apple has lots of money. They are flaunting it and everyone wants a piece of it. The only way that's going to happen is if the laws change. In which case, every other company that's engaged in international business will also be impacted by. Lobbyists will continue to see that this doesn't happen.

WhatDidYouSayWillis says:

Say What???

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Becjr says:

Apple owes me $712,325 dollars for making me dependably addicted to their technologies! They did it on purpose I tell ya!!

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imoredaddy says:

The whole Italian government and judicial system is suspect. If they demand the money, I would close up shop and just stop selling in Italy. They need to realize they can't use mafioso techniques with billion dollar corporations.

Carioca32 says:

Oh those poor innocent billion dollar corporations. To imagine someone would use mafioso techniques against them...

johncblandii says:

What an amazing photo of that store. Gorgeous!

Carioca32 says:

Its funny that when Apple was accused of doing the exact same thing in the US a few months back and Cook was brought before the US congress nobody thought it was amusing. Now its "Cash-starved Italy" and "figgetaboudit".

GeniusUnleashed says:

"Fuggedaboutit." Damn Canucks butchering our beautiful language.

Jonathan Moosey1 says:

This is so typical of big government. Sounds like a tactic that Obama would do just to get more money to cover his wreck less spending. It's not about me defending Apple out of habit. I defend free market capitalism out of habit.

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Team George says:

In terms of PR, I do think Apple does itself no favours when it uses tax loopholes. Legal or not, it is at worst immoral and at best not in their interests given the negative publicity it leads to.

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