Apple's Italian subsidiary has agreed to pay €318m (£235m; $348m) following an investigation into tax fraud allegations, Italy's tax office says.
Italy's tax authorities say the company failed to pay €880m in tax between 2008 and 2013, according to La Repubblica.
The settlement follows an investigation by prosecutors in Milan.
The US tech giant has not commented on the deal.
Several thoughts inevitably follow.
First, if the Italians have succeeded why haven't HMRC even tried?
Second, what use is the General Anti-Abuse Rule if it could not be used against such abuse (so far it has not been used at all)?
Third, why the Diverted Profits Tax if cases could be brought in any event?
Fourth, have HMRC now asked for full details so they can replicate the case?
Fifth, when will we clear out the business heavy top echelons of HMRC so that an appetite for such cases is created in this country?
I don't expect any answers will be forthcoming from HMRC, but we are owed them.
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Sixth, when can we expect the tax authorities of whatever country to actually recover the full amount of tax owed rather than doing sweetheart deals with these entities for a fraction of the taxes owed.
As Bill Lawrence pointed out last week the rest of us do not get such consideration or largess.
Can the General Anti-Abuse Rule be used retrospectively?
By definition it has to be
But not before it was passed
But we’ve now had it for long enough to know it was a sop to the Lib Dems
For HMRC to be shamed by the Italians is appalling. Italian administative systems have, to put it mildly, a poor reputation. So HMRC cannot even manage to deliver an Italian level of service…Hope the Select Committee gets on to this.
For your information Italy is light years ahead of the uk and not only in collecting taxation from international companies. The smoking ban was introduced before the uk and the ban on plastic bags was introduced years ago. Cameron needs a rocket up his backside.
you said well Italian administrative system have a poor “reputation”. But reputation remain a reputation that could not correspond to reality. The reality is made of diffeent public services in which people work. So what you are assuming on the service delivered by italians fiscal authorities you don’t even Know is bullshit. The maximum respect of my collegues of HMCR, which i have hte honour to work with. I m one of those which worked on the case for about two years. And if at the end Apple decided to pay, and it’s the first time in the world, may be it means that the level of the service its not so poor but very excellent.
Best regards
Heey! Wassa matta fo you? This is a good week to be Italian so stop trying to get two negatives out of a positive.
Sorry, but saying that HMCR cannot even manage to deliver an italian level of service which has the reputation to be poor, don’t seems to me as positive as you said. There is anything there saying italian fiscal authorities has made a good work!!!!! Just that HMCR level of service, is worse of the worse. And there again I believe is an assumption made not having a real knowledge of the matter. Anyway as far as i m concerned,loking at the last comments which seeem more focused on blaming HRMC not using GAAR for political reason (something i cannot understand cause if a rule is on force then there’s not political reasons)not thinking that as i already suggested this rule doesnt fit at such a case, I leave the discussion to the UK think thank.
Best regards and happy new year!
They were probably trialling ipads
Apple is one among many…and with all the trade agreements and investor-state laws, it may well be that the large corporations will soon be telling us to pay more tax, and litigating (in courts they run) against us for asking them to pay tax….
After all, our governments are run by legal/financial/industrial lickspittles and expenses crooks.
Maybe it’s because in Italy the Guardia de Finanza (tax police) have guns !!
Could you clarify Richard, you state they were found guilty of defrauding €880m so to resolve this they “agreed” to pay €318m. It seems to me that breaking the law has left them €562m better off, it does not give corporations much incentive to pay what is due, does it?
I am quoting
I cannot clarify
I suspect one is the profit not taxed, the second the tax due
“The company’s Italian subsidiary allegedly failed to declare more than one billion euros ($1.5 billion) to the tax authorities, according to Italian daily La Repubblica.
According to the publication, Apple Italia should have paid corporation tax of 880 million euros ($1.3 billion) for the period.
But after months of negotiations, the tax authorities agreed to close the case in return for a cheque for 318 million euros”
http://www.abc.net.au/news/2015-12-30/apple-ordered-to-pay-italy-318-million-euros-after-tax-fraud/7060908
Dear Mr Murphy,
After the reply to the comment for which i m sorry if used colourful expressions, I try to answer some of your question.
First: I don’t Know if HMCR have ever tried. Maybe they have made some controls but the point when you make a control, if you ever have the opportunity to control the right company, is the reason. In other word if you are checking for VAT or other. That’s not irrelevant…IN fact as you noticed the recovery has come from a criminal investigation…it means that not administrative power are used but the more powerful that criminal laws allow to investigator…and again for going by these way you need some pieces that could indicate a that tou suspect are not based on nothing. If not any prosecutor give you the possibilty to go furhter.
Second: its not the general anti abuse rule which has been used because that rules could not be applied at the case which is not a practice of elusion when you have a formal respect of fiscal rules but used only in away to save taxes.
Fourth; Even if HMCR ask for full details now its not sure, even if the practice would be the same on UK, they could proof it. Just beacuse as i said the recovery has been based not on evidences you would find using administrative power on record books.
To apply the GAAR there has to be political will; and that has never existed in the UK and does not exist now. Frankly you need a change in the law where the place of taxation is where the economic activity takes place not where the paperwork tries to suggest. The former is quite easy to determine.
You also need a well run department with well motivated staff. HMRC has neither. The political will of this government is reflected by the award of a gong to HMRC leader in the latest honours. Anybody looking at her track record should surely question this at least. Even the Tory leaning Daily Mail picked up on this.
The new APPG on Responsible Tax is working on this
I will be submitting evidence