Italy suspects Apple of tax evasion
The leadership of the Italian representative of Apple is forced to explain about the possible tax evasion in the country. The prosecutor’s office of Milan has already opened an investigation on the basis of suspicion that the American manufacturer of iPhone and iPad has hidden more than a billion euros of tax base from Italian tax officials.
According to the Espresso weekly, prosecutors in the country suspect the company that two of its employees provided accounting reports with underestimated tax rates to the tax authorities in 2010 and 2011. Amounts were underestimated by 206 and 853 million euros, respectively. Accordingly, the total amount with which taxes were not calculated in the Italian budget amounted to more than 1.06 billion euros.
It is believed that part of the proceeds earned in Italy could have been deposited with an Irish company controlled by Apple, using fraudulent schemes, which allowed the American giant to take advantage of a number of tax advantages. The branch allegedly booked part of its profits through the Irish branch of Apple Sales International (ASI), thus lowering his taxable income in Italy.
Earlier this week, Milan prosecutors searched the headquarters of the Italian representative office of Apple, writes IA Interfax. Police seized computers and telephones, which may contain documents confirming fraudulent schemes of the American corporation.
As recalls Investkafe, technocorporation is not the first time accused of tax fraud. In May 2013, a group of senators accused Apple of exporting billions of dollars through affiliated companies. Tim Cook, head of the corporation, denied all the allegations. Although tax avoidance schemes are well known and have been used by large US companies for several years.
Apple also creates multi-level corporate structures in countries with low tax rates and transfers funds between them as part of a tax optimization strategy (“Double Irish with a Dutch Sandwich”). According to her, part of Apple’s business in Europe is conducted through the Irish division of the company, through which up to 30% of corporate profit is ultimately spent.
Experts note that almost 70% of Apple’s profits are earned outside the United States, despite the fact that the company’s headquarters and major design and development centers are located in this country. Internal tax offshores are used directly on the spot: its headquarters are located in California, but Apple pays most of the taxes in neighboring Nevada, where the tax rate for a number of transactions is zero. Also in progress is the work of representative offices under foreign jurisdiction. For example, a representative office in Germany can be registered in Singapore or Luxembourg, where the terms of financial interactions are completely different.
According to a Dow Jones Business News source, the investigation by the prosecutor’s office in Milan is a regular tax audit, and the company has not yet charged anyone. Apple currently only bears reputational costs – not even responding to media allegations.
Earlier, the company’s management has always stated on such charges that it already carries a heavy tax burden: in 2012, the company paid $ 6 billion in income tax. “Apple calls itself the largest taxpayer in the United States, but omits the fact that it is also among the largest taxpayers,” Vedomosti quoted the response of Republican Senator John McCain. According to the current situation, the representative office of the American company in Italy has not yet commented on this information. It is possible that everything will remain as it is and the matter will not advance further hype in the press.