Skip to main content

Apple has agreed to settle $347M Italian tax claim in full after profits were funnelled through Ireland

euroma2_hero_2x1

Apple, which was accused by the Italian government of failing to declare more than $1.3B of income when paying corporation tax in the country, has now agreed to pay the full €318M ($347M) claimed by the Italian tax office. The company has 16 Apple Stores in Italy.

Apple was accused of funnelling profits from Italian sales through its Irish subsidiary in order to benefit from the lower tax rate the company had agreed there. (Those tax arrangements are the subject of a separate EU investigation.)

La Repubblica (via The Local) reports Apple Italia was listed as a “consultant” for Apple Ireland, enabling the company to book profits through Ireland, paying just 2.5% tax under the terms of an agreement said to have first been reached with Steve Jobs back in the 1980s …

Apple channels most of its European profits through Ireland. It has been suggested that the agreement between Apple and the Irish government, exempting the company from the normal 12.5% paid by most companies, is illegal. An EU investigation into the arrangements has recently been expanded and extended.

Should that ruling go against Apple, the company would have to pay the difference for up to ten years. The company last year warned shareholders of this possibility, stating that the amount would be ‘material’ but that it was unable to estimate the amount. The Financial Times last year estimated it at $2.5B. Apple would not, however, be subject to any fines or penalties: the law would have been broken by the Irish government rather than by Apple.

Apple has always taken the line that it pays every dollar that it owes, Tim Cook recently describing claims that it avoids tax as “political crap.”

Photo: Apple (Euroma2 store, Rome)

FTC: We use income earning auto affiliate links. More.

You’re reading 9to5Mac — experts who break news about Apple and its surrounding ecosystem, day after day. Be sure to check out our homepage for all the latest news, and follow 9to5Mac on Twitter, Facebook, and LinkedIn to stay in the loop. Don’t know where to start? Check out our exclusive stories, reviews, how-tos, and subscribe to our YouTube channel

Comments

  1. 89p13 - 8 years ago

    And I’m sure a number of American Companies with “Irish subsidiaries” will be fearful of the potential outcome.

    • Ben Lovejoy - 8 years ago

      Indeed – things could get interesting between this and the EU investigation into Ireland’s alleged ‘state assistance.’

  2. Johan Gunverth - 8 years ago

    Don’t fuck with Guardia di Finanza. They drive Alfa Romeo and use machine guns to claim the loot. :D
    http://www.ledsocialistieuropei.it/wordpress/wp-content/uploads/2014/10/GUARDIA-di-finanza.jpg

  3. Andrew Williams - 8 years ago

    I expect the French will be next because every time I buy something from Apple.fr or an Apple Store here in France my payment shows up on my bank statement as an overseas (albeit still euro) payment. I assume it’s Ireland.

    • Ben Lovejoy - 8 years ago

      Yes, Apple does this throughout the EU.

      • Andrew Williams - 8 years ago

        It’s a bloody pain that they do because my French bank has strict limits on how much they “allow” you to spend on your cards each month, no matter how large your bank balance is. There’s one limit for payments in France and another lower limit for overseas payments. Twice now I’ve had my payments to Apple.fr refused and have had to visit the bank and actually argue with them (shouting was involved) to get them to temporarily increase my limit. They do not like doing that, trust me! LOL

  4. Doug Aalseth - 8 years ago

    “Apple has always taken the line that it pays every dollar that it owes, ”
    Yes but they don’t say anything about every Euro…
    :)):

  5. Roman Hawke - 8 years ago

    I have love hate relationship with apple, and I have always said Tim Cook is full of SH*T. Apple pays every dollar owed? Just caught out as a liar haven’t you Cook?

Author

Avatar for Ben Lovejoy Ben Lovejoy

Ben Lovejoy is a British technology writer and EU Editor for 9to5Mac. He’s known for his op-eds and diary pieces, exploring his experience of Apple products over time, for a more rounded review. He also writes fiction, with two technothriller novels, a couple of SF shorts and a rom-com!


Ben Lovejoy's favorite gear