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Italy Investigates Apple For Alleged Tax Fraud

samzenpus posted about a year ago | from the pay-the-man dept.

Crime 175

Frankie70 writes in with some more bad news for Apple in Europe. "U.S. tech giant Apple is under investigation in Italy for allegedly hiding 1 billion euros ($1.34 billion) from the local tax authority, two judicial sources with direct knowledge of the matter told Reuters. Milan prosecutors say Apple failed to declare to Italian tax authorities 206 million euros in 2010 and 853 million euros in 2011, one of the sources said, confirming a report by Italian magazine L'Espresso. The Italian subsidiary of Apple booked some of its profit through Irish-based subsidiary Apple Sales International (ASI), thus lowering its taxable income in Italy, the source said."

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Corporations dodge tax. (0)

Joining Yet Again (2992179) | about a year ago | (#45421159)

News at 11.

Expect to have your life ruined for underpaying or being overpaid by a few cents/pennies, though.

Capitalism: it always ends up like this.

Re:Corporations dodge tax. (1)

Anonymous Coward | about a year ago | (#45421281)

I know that this is slashdot and that you aren't supposed to read the headline but the entire point is that the Italian government actually tries to do something about corporative tax-dodging.

Re:Corporations dodge tax. (1, Insightful)

Joining Yet Again (2992179) | about a year ago | (#45421307)

Clearly you haven't been paying attention to the Italian government for the last half-century.

The problem will not be that Google has not been paying tax - the problem will be that Google hasn't been greasing the right palms.

Re:Corporations dodge tax. (1)

Anonymous Coward | about a year ago | (#45421371)

I know that this is slashdot and that you aren't supposed to read the headline but it is about Apple, not Google.

Re:Corporations dodge tax. (1)

Joining Yet Again (2992179) | about a year ago | (#45421381)

What's the difference?

Re:Corporations dodge tax. (1)

bobstreo (1320787) | about a year ago | (#45421401)

What's the difference?

The amount of zeros in the payout.

Re:Corporations dodge tax. (1)

Joining Yet Again (2992179) | about a year ago | (#45421421)

Well played.

Re:Corporations dodge tax. (1)

flyingfsck (986395) | about a year ago | (#45421441)

Well then why not drag Microsoft and Amazon into it too? Gapple, Mapple and Applezon?

Re:Corporations dodge tax. (1)

Joining Yet Again (2992179) | about a year ago | (#45421451)

Sounds good, but the witless /. mods will strike me down with fiery vengeance for suggesting that all the teams are the same.

Re:Corporations dodge tax. (1)

MysteriousPreacher (702266) | about a year ago | (#45421573)

Witless they may be, so it's maybe by chance they correctly modded you down. Alice: Germany, what about those salamis they make? You: It's good but the Italians really need to make better mustard Alice: What? You: Exactly! That's you in a nutshell

Re:Corporations dodge tax. (1)

Talderas (1212466) | about a year ago | (#45421593)

Goomapplezon?

Re:Corporations dodge tax. (0)

Anonymous Coward | about a year ago | (#45421885)

We don't hate Google yet. Or not that much anyway.

Re:Corporations dodge tax. (1)

cjjjer (530715) | about a year ago | (#45422287)

Supposedly one *does* evil and one *does no* evil, but the lines are pretty blurred on who...

Re:Corporations dodge tax. (-1)

Anonymous Coward | about a year ago | (#45421403)

You named a completely different and unrelated company that has nothing to do with the story and still you get modded up.

Did you even read the article? The headline? Does this place consist of anything more than bots and chimps these days?

Re:Corporations dodge tax. (-1)

Joining Yet Again (2992179) | about a year ago | (#45421415)

AC, both your ingenuity and your dullardry are unbounded.

Re:Corporations dodge tax. (1)

jythie (914043) | about a year ago | (#45421865)

The flip side is that the Italian government is notoriously corrupt. If it was a story about, say, Germany coming after Apple for tax evasion I would be 'yay Germany!', but in this case I am not sure I would even believe the charges.

Re:Corporations dodge tax. (0)

DNS-and-BIND (461968) | about a year ago | (#45421775)

Yeah, you're right - capitalism always ends up with huge amounts of money. Strange how that works. Damn those capitalists! Meanwhile a socialist economy is failing again [economist.com] . Why does this always happen!

Re:Corporations dodge tax. (1)

Joining Yet Again (2992179) | about a year ago | (#45421835)

I don't know, why do economies based on ideology always fail and have to be rerouted back to mixed economy?

Why don't we ask the USA or Western Europe, since they've had some excellent recent experience with that problem.

italians (5, Interesting)

Redmancometh (2676319) | about a year ago | (#45421189)

Not the people to try tax evasion with...they are pros

Re:italians (0)

Anonymous Coward | about a year ago | (#45421223)

Italian Corporations? No single individual or national group comes close to ANY multinational corporation.

Re:italians (0)

Anonymous Coward | about a year ago | (#45421635)

Oh please. Are you telling me everything is fine and done by the book in the promised land of mafia? Apple is a damn amateur who got caught. I bet the mob dodges taxes that arent even theirs.

Re:italians (2)

flyingfsck (986395) | about a year ago | (#45421681)

For many, many years, the Italian Premier Andriotti, was actually the chief of the Mafia.

Re:italians (-1)

Anonymous Coward | about a year ago | (#45421933)

I prefer living in the "promised land of the mafia", as you call it, rather than in the promised land of fatties, the NSA and the jewish lobby.

Re:italians (0)

angelofdarkness (1906138) | about a year ago | (#45421233)

Mod parent Up! (Where are mod points when you need them...)

Re:italians (1, Troll)

IamTheRealMike (537420) | about a year ago | (#45421391)

Except that if you RTFA it doesn't sound like tax evasion at all. It sounds like the Italians are broke and are harassing Apple because they don't like the fact that Apple bases itself in Ireland.

(Reuters) - U.S. tech giant Apple is under investigation in Italy for allegedly hiding 1 billion euros ($1.34 billion) from the local tax authority, two judicial sources with direct knowledge of the matter told Reuters ..... The Italian subsidiary of Apple booked some of its profit through Irish-based subsidiary Apple Sales International (ASI), thus lowering its taxable income in Italy, the source said

"There is a global process under way and the Italian tax authority is one of the most active," said an Italian tax source. "In general, the focus is shifting towards multi-nationals that are able to lower their tax base through their international operations."

Apple is many things, but sloppy and ridden with fraud is not one of them. The Italian government, on the other hand ....

Re:italians (1)

Anonymous Coward | about a year ago | (#45421437)

Maybe you don't know exactly European taxes laws.

Re:italians (0)

Anonymous Coward | about a year ago | (#45421495)

Don't worry, he also thinks it's ok for a few corporations to gobble the world's wealth and let millions starve having nothing.

Re:italians (0)

Anonymous Coward | about a year ago | (#45421697)

Yeah, heaven forbid that risk takers actually get something for their troubles. Fuck off, communist.

Re:italians (1)

Chickenlips (33524) | about a year ago | (#45422019)

Except that, as shown by the recent past, there is no risk! Stupid, ill advised gamble gone bad? No worries! The tax payer's money to the rescue. Heaven forbid the risk takers should shoulder their own risk, as well as pay their fair share of the infrastructure that allows them to flourish in the first place.

Re:italians (1)

I'm New Around Here (1154723) | about a year ago | (#45422195)

This is only because the people who want big government demanded it pay those companies for their risky behavior. The people who want smaller government, like myself, said "Fuck them, let them starve."

I'm not sure on which side you care to place me for that, but I think it was the more consistent stance.

Re:italians (1)

MachineShedFred (621896) | about a year ago | (#45421687)

Maybe not, but I'm guessing that Apple employs a team of lawyers that do. This sounds like a fishing expedition from a European state who is currently in a financially shaky position, during a time of political change. It's easy to score some cheap political points by beating up on the big bad American corporate tax cheats, and when the whole thing is dismissed in a few months, no one will report squat.

Unless, of course, Apple is actually breaking Italian revenue code, in which they need to cough up the cash. And then Italy needs to go after everyone else that is doing the same tax avoidance shenanigans (Google, Microsoft, Nokia, etc.).

Re:italians (1)

IamTheRealMike (537420) | about a year ago | (#45421929)

These companies have been running in Ireland for years, if it was illegal don't you think this would have been noticed by now? Here, read this [theregister.co.uk] and you may gain some clarity on the matter.

If they're based in Ireland, why are they in Italy (5, Insightful)

Anonymous Coward | about a year ago | (#45421497)

They do business in Italy. They get money in Italy. They pay Apple (Eire) an extremely uncomptetitive rate for the "rights" to use their own frigging products in Italy so that they make no profit off massive revenue.

It's absolutely no different from Hollywood Accounting.

And it IS tax evasion.

If a private corporation cannot make 3% ROI, then it's a failure. Since so many multinationals manage to wrange a way to a NEGATIVE return on investment, then how the hell is this fatuous meme "The private industry can be profitable, the government can only run things into the ground" created?

Because they're avoiding taxes by tricks.

They have two options

1) they are incompetent, in which case they should be closed down by shareholders for incompetent management and all C*O pay should be slashed because so few manage to make any profit for the company.
2) they are illegally evading taxes but are otherwise actually competent at business

Re:If they're based in Ireland, why are they in It (4, Insightful)

lxs (131946) | about a year ago | (#45421717)

Technically it's tax avoidance, which is immoral but not illegal.

Re:If they're based in Ireland, why are they in It (0)

Anonymous Coward | about a year ago | (#45421809)

technically whenever justices wish using loopholes that go clearly against intent of the law is illegal, turning tax avoidance into tax evasion.

Re:If they're based in Ireland, why are they in It (2)

Xest (935314) | about a year ago | (#45421937)

Well in this case, apparently not.

I think that's precisely why Apple is being investigated here, what's mere avoidance in other countries sounds like it may well be evasion in Italy.

Re:If they're based in Ireland, why are they in It (1)

phayes (202222) | about a year ago | (#45422421)

I'd be extremely surprised if it was Tax Evasion as Apple has very competent lawyers and accountants and the methods employed are clearly legal according to the laws as they stand. If Italy changes their laws to make the Double Irish illegal & Apple still tried to tunnel their profits out of Italy using it, then it would be illegal.

Every single state in the EU has refused to outlaw the strategy Apple, Google, Starbucks, etc are using because unless they all change at the same time, the countries that outlaw it would be at a competitive disadvantage. EU politicians need to grow some stones and work out a plan for outlawing the practice globally in the EU or stop whining when the laws they write are followed as they are written.

Avoidance = Evasion (2)

sjbe (173966) | about a year ago | (#45422165)

Technically it's tax avoidance

Avoidance is a synonym for evasion. A distinction without a difference whether it is legal or not. They might be obeying the letter of the law but it is tax evasion nonetheless.

Re:Avoidance = Evasion (0)

Anonymous Coward | about a year ago | (#45422267)

Legally they're distinctly different.

Re:Avoidance = Evasion (1)

alexander_686 (957440) | about a year ago | (#45422473)

Not it’s not. Let’s talk about “Transfer Pricing” which is subjective. Issue like this happen because the tax rules in the two different countries and not aligned. It is a subjective quagmire with no correct answer. Heck, I am hard pressed to think of 2 countries where they are aligned. However, there are rational solutions out there.

Apple (Ireland) and Apple (Italy) sell a product and make $100 in profit.

Apple claims most of the profit was made in Ireland and is subject to Ireland’s low taxes. But then again they structure the prices (and thus profits) at which the two units transfer goods between them to minimize the taxes.

Italy claims 100% of the profit was made in Italy and should pay Italian taxes. But then again they are broke and looking to tax anyone except their own voters.

Re:If they're based in Ireland, why are they in It (1)

Carewolf (581105) | about a year ago | (#45422431)

So you are an expert on Italian law? It is a common trick used by many companies but it is illegal in most places. The hard part for the local tax offices though is to prove the internal pricing between Apple offices is fraudulent.

Re:If they're based in Ireland, why are they in It (2)

UnknowingFool (672806) | about a year ago | (#45421881)

It's absolutely no different from Hollywood Accounting. . . Because they're avoiding taxes by tricks.

Um, that's a contradiction. Corporations like Apple pay less in taxes because they can find loopholes. That's very different than a corporation basically lying to their creditors about how much money they made. I suspect that the Italian government, because it is desperate for money, are now going after practices that they've allowed for years even though tax laws have not changed.

In crisis-hit Italy, tax authorities faced with dwindling revenues have become more aggressive with domestic and multinational companies.

They have two options

Or they can wait until the audit is over and Italy finds that they did nothing wrong.

Re:If they're based in Ireland, why are they in It (2)

drinkypoo (153816) | about a year ago | (#45422351)

Corporations like Apple pay less in taxes because they can find loopholes.

We call them loopholes specifically because they present a way to do a run around the intent of the law. Simply by speaking English correctly you have doomed your own argument.

Re:If they're based in Ireland, why are they in It (5, Insightful)

IamTheRealMike (537420) | about a year ago | (#45422017)

They do business in Italy. They get money in Italy.

They do business in Ireland and they sell to customers in Italy. The whole point of the EU is it's a single market, that means, you can establish your company once and sell to everyone within that market. If you set up in Ireland and sell to Italians, not only is that not tax evasion, that is the point of the EU in the first place!

These companies have all had exactly the same tax arrangements for years and as Apple point's out in the article, have been repeatedly audited and passed. In fact Italy appears to have audited Apple three years in a row, which seems only explainable as harassment - tax audits are supposed to be semi-random spot checks to ensure compliance. If you pass an audit, getting audited the next year is just a waste of time and money for all concerned.

What's happening now is that a lot of governments around the world, having spent many decades promoting trade and economic integration when times were good and they had excessively cheap credit, now decided that maybe free trade isn't such a hot idea after all. After all, it might mean that other countries who you trade with end up more appealing to do business in. Ireland has had a long-standing policy of aggressively attracting international businesses with low tax rates, it's a very popular policy amongst the people in Ireland, and in fact until their government foolishly panicked and committed to a full bailout of their banks their economy was doing great. If the Italians are now mad about it, they have two choices:

1) Start rolling back the EU single market, then they can pass rules that say "if you want to sell stuff to Italians, you must run your business out of Italy and pay whatever taxes we want to do that" (of course this means some companies won't bother)

2) Deal with it and find other sources of revenue, whilst enjoying the fact that when Italian companies sell to the Irish, the Italians get to keep the corporate tax from that.

Right now governments are trying to do both simultaneously, which is why they grind to a halt in an internal deadlock of contradictions and you get bizarre setups like companies buying things from themselves.

Apple specifically will "solve itself" after a while because probably, Ireland will start making them corporation tax in Ireland safe in the knowledge that it's still more appealing than the alternatives. However this will not satisfy other members of the EU who dislike tax competition.

By the way, your post is very emotional. Tax should not be an emotional topic. Tax is (or rather should be) a technical matter in which people analyze the most efficient ways to raise the revenues governments need to function. Whether corporation tax is even a good idea at all is a matter of some debate in academic circles - the fact that you're trying to tax an entity that doesn't actually have any specific physical location is one reason why everyone ends up feeling like it's "not fair".

Re: If they're based in Ireland, why are they in I (0)

Anonymous Coward | about a year ago | (#45422185)

The Irish economy was not doing great before the bailout. The fact that they couldn't raise interest rates burnt them badly when their economy overheated.

Re:If they're based in Ireland, why are they in It (0)

Anonymous Coward | about a year ago | (#45422277)

All big American companies do that in Europe, Micro$oft is another bright example.
They open a subsidiary in the European country with the lowest taxes (namely Ireland) and make business in whole Europe.
Sometimes they get caught because they don't clean up properly.

And this is why Apple is in Italy even though it's based in Ireland.

Re:italians (3, Funny)

Rougement (975188) | about a year ago | (#45422029)

The Italians wrote the book on tax evasion. Then they failed to declare income arising from the book sales.

Guardia di Finanza (0)

Anonymous Coward | about a year ago | (#45422349)

Not the people to mess around with, indeed.

Back in the 80's, I was riding with a friend in Sicily... the GF unit that stopped us to check that the appropriate tax stamps were on licenses, registration, etc., were openly carrying fully automatic submachine guns....

It is time to stop criminals. (0)

HansKloss (665474) | about a year ago | (#45421215)

Most of big corporations are infiltrated with criminals wearing executive suits. And I'm tired of excuses, "it's legal because our lobbying arm wrote the legislation and paid the right people to pass it"
Criminal is criminal! No matter how many laws are passed.
We all pay the price when money is constantly siphoned and siphoned to private corporations by governments sitting deeper and deeper in debt.

Re:It is time to stop criminals. (5, Insightful)

Joining Yet Again (2992179) | about a year ago | (#45421251)

Criminal means convicted under the law - so it's precisely lobbying and other corruption which stops this behaviour being criminal.

There is no solution except a tempering of capitalism. If you allow businesses to become too powerful, they will take over governments. They have taken over governments.

Re:It is time to stop criminals. (1)

Cruciform (42896) | about a year ago | (#45421397)

When you go to get a new driver's license, or vote, and they ask you if you want fries with that... it's time to move.

Re:It is time to stop criminals. (0)

Anonymous Coward | about a year ago | (#45421491)

We're there already, but they ask for political donations.

Re:It is time to stop criminals. (0)

Vitriol+Angst (458300) | about a year ago | (#45421553)

I think the main reason Apple gets on everyone's radar is because they are the least politically active. The really corrupt companies spend a lot of money greasing palms and trying to win deals that make them part of the infrastructure.

Seriously, Italy is the guiding light now of standing up to corruption? Is Berlesconi in Prison yet?

Ya'll come on down, orgies at the capital and free wine! Of course, Apple, shame on you! You aren't invited to the after party.

Re:It is time to stop criminals. (0)

Anonymous Coward | about a year ago | (#45421615)

I hope you aren't to recommend the use of government as the tool for a "tempering of capitalism". Such a "solution" will only result in more of the same.

Look, companies lobby governments so that the companies can make more money. The companies generally don't care about public policy one way or the other. It's like asking a rabbit to care about the fuel efficiency of your car.

"Public servants", on the other hand, are generally incompetent at making money, so they amass political power that they can then use to influence the lobbying businesses (the ones that generally don't care about policy) to give them lots of money, whether to the public coffers (taxes) or to their personal ones (campaign contributions). In short, it's a legalized protection racket, complete with the real threat of harm (regulations, lawsuits, investigations, etc.) with individual politicians the substantive beneficiaries.

To your point, if you bolster the power of companies, you wind up with companies having unjustified influence in government through the power of their money which government wants. On the other hand, if you bolster the power of government, you wind up with companies having unjustified influence in government through the power of their money which government wants.

Now, knowing that, what peaceful solution do you recommend?

"Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together. " - Harry S. Truman, http://coursesa.matrix.msu.edu/~hst306/documents/indust.html

By the way, if you look closely, you will find that principle applies to all industries and all positions of government.
The problem is not the companies. The problem is not the government. The problem is very, very human.

Re:It is time to stop criminals. (1)

Joining Yet Again (2992179) | about a year ago | (#45421641)

Well, governments aren't going anywhere, and neither are powerful individuals, so either you temper them with a good dose of social democracy, or you lie down and give up.

Re:It is time to stop criminals. (0)

Anonymous Coward | about a year ago | (#45422031)

To reiterate, social democracy (i.e. bolstering the power of government) doesn't solve the problem, because:
"if you bolster the power of government, you wind up with companies having unjustified influence in government through the power of their money which government wants."

I'm not saying that government or companies are going away or should. I'm saying that we need to stop looking at them as if they are enemies, because more often then not, they are in cooperation without regard to other stakeholders.
The issue isn't as simple as businesses versus governments and we need to face up to that.

but, perhaps I missed the point with your dismissive generalization?

Re:It is time to stop criminals. (1)

Joining Yet Again (2992179) | about a year ago | (#45422177)

Social democracy isn't bolstering the power of government - the government is already large and powerful and in the hands of businesspeople. I am talking about change of control.

I don't know what you mean about not seeing companies as if they are enemies. I don't see any of this in terms of enmity or friendship, just power grabs.

Anyway, there's my dismissal of two of your straw men.

Re:It is time to stop criminals. (1)

Anonymous Coward | about a year ago | (#45421669)

Capitalism is SUPPOSED to be economics model, not governing model. Capitalism seems to be shooting itself in the foot by oversteping it's limits. Sooner or later the model WILL be changed. If the "wealth" (bits in a computer) is concentrated enough people will abandon the system. Imagine you and your friends creating an imaginary money unit. All goes well as long as the money keeps circulating, if one of the people involved hoards is aal, the other have to find a different money to use as means of trade.

Re:It is time to stop criminals. (0)

Anonymous Coward | about a year ago | (#45422121)

Or, you know, taking away the government power they're seizing. A powerless government stops being a target for corruption.

Re:It is time to stop criminals. (1)

Joining Yet Again (2992179) | about a year ago | (#45422237)

Then you take advantage of that law of physics which says that vacuums are never filled.

Re:It is time to stop criminals. (0)

Anonymous Coward | about a year ago | (#45421489)

Most of big corporations are infiltrated with criminals wearing executive suits. And I'm tired of excuses, "it's legal because our lobbying arm wrote the legislation and paid the right people to pass it"
Criminal is criminal! No matter how many laws are passed.

Apparently you do not know the difference between legal and illegal. Perhaps I should bring up the fact that you're able to go to a bar after work and have a drink. That was not always legal. As you stand there with a drink in your hand reading about how another drunk killed an innocent victim, please tell me again how I would be wrong to want to make alcohol illegal again. Seems you're quite righteous about what is right and wrong when it doesn't affect you.

If you don't like the way corporations manipulate your elected representatives with their lobbyists to make what they are doing legal, then fucking do something about that singular component you as a voter still control, because you sure as hell don't have control over anything else.

And maybe now that the urban myths of Obama the Savior have been dispelled amongst the voters he bought with that bullshit, common sense will stand a fighting chance at the polls. Let's hope and pray the female demographic isn't near as ignorant and simply vote with their vaginas as Hillary steps in the ring. Certainly no savior there either as we recycle yet another era of failure back in the office. As much as we mock royalty vs. elections, our structure isn't much better with the Bush and Clinton dynasty. We hardly change names or lineage either, and yet voters expect a different outcome. No wonder you are referred to as sheeple.

We all pay the price when money is constantly siphoned and siphoned to private corporations by governments sitting deeper and deeper in debt.

No Shit. Tell me something the last three decades don't know. This isn't new. It's hardly worse. It simply perpetuates in the addiction that is greed.

Apparently you can't read (0)

Anonymous Coward | about a year ago | (#45421527)

Even when you quoted it, your follow up was nothing to do with that which you quoted, indicating that all you can do is write, never read.

Saddam Hussein did not illegally have Kurds killed. He made it legally right to do so.

Yet somehow in this case what the legal law said was irrelevant because the one breaking the law that should be there was writing the laws.

In this case, the only difference being you worship corporate criminality because you have a chance of gorging at the trough, whereas you weren't getting your beak wet in Iraq.

Isn't apple a church (0)

Anonymous Coward | about a year ago | (#45421235)

Apple just needs to register itself as a text exempt church to solve all this tax mess.

Re:Isn't apple a church (1, Funny)

gl4ss (559668) | about a year ago | (#45421333)

dunno if claiming as a church would go down in italy.

vatican has monopoly on that.

Predictable (2)

tstur (38065) | about a year ago | (#45421263)

While despicable since megacorps like Apple have no defense for not paying what's owed as part of the cost of doing business, it remains to be said that the taxation system worldwide is completely out of control. No percentage will ever be enough for any government and thus tax paying entities must find techniques to minimize the fleecing.

Re: Predictable (5, Insightful)

Anonymous Coward | about a year ago | (#45421313)

Your tax is so high because these people don't pay any. 1 billion divided by 30 million taxpayers in Italy is 30 bucks each.

Re: Predictable (3, Insightful)

tstur (38065) | about a year ago | (#45421475)

Trouble is that argument implies there is some magic number that equals Enough for the taxing authority, and there isn't. Or it's enough for that year, then it must be raised again. And again. And Again... Entities not paying tax are not the cause of ever increasing rates.

There is such a value. (2, Insightful)

Anonymous Coward | about a year ago | (#45421513)

Paying for the stuff being done is a "magic number that equals Enough for the taxing authority".

Morover, when the subject is executive compensation, you're all about how it's allowed that they can just be given as much as they can get away with because "you can't put a limit on what someone earns".

Yet when it comes to government, somehow, there's a magic number that they cannot spend above and must be limited.

Hell of a double standard you've got there.

Re:There is such a value. (1)

tstur (38065) | about a year ago | (#45421587)

Right, and the stuff being done is not a static set. Did we need a F-35? Probably not. But the money got spent because it's relatively easy to print more and/or tax more. I'm all for paying for the essential services and benefits, but my point is it's never enough, no matter who your government is.

What does exec compensation have to do with tax rates?

Re:There is such a value. (1)

DNS-and-BIND (461968) | about a year ago | (#45421735)

Where did executive compensation come from, and how does it negate the point that governments raise taxes constantly?

Re: Predictable (1)

AmiMoJo (196126) | about a year ago | (#45421677)

Entities not paying tax are a direct cause of increasing rates, because the rates have to go up to compensate for the lost income from the criminals not paying their fair share.

Re: Predictable (2)

0123456 (636235) | about a year ago | (#45421985)

Your tax is so high because these people don't pay any. 1 billion divided by 30 million taxpayers in Italy is 30 bucks each.

Ha-ha. Who do you think pays the money to the corporations that they then hand it to the government?

Hint: it's not the space fairies.

Corporate taxes are just a way to tax more money from 'the people' while getting idiots like yourself to cheer it on. Every penny comes from increased prices, reduced wages, or reduced income for stockholders.

Re: Predictable (1)

moronoxyd (1000371) | about a year ago | (#45422373)

Ha-ha. Who do you think pays the money to the corporations that they then hand it to the government?.

Let's see: If the American company Apple does business in Italy but moves it's money to Ireland to pay taxes there, the taxes lost to the Italian treasury are paid by... ah yes, here it is: The Italian people.

The Italian people first pay the multinationalcompany for the products and then again have to make up for the taxes that this company evaded paying.
And the multinational gets richer and richer...

Re: Predictable (1)

drinkypoo (153816) | about a year ago | (#45422401)

Ha-ha. Who do you think pays the money to the corporations that they then hand it to the government?

Hint: it's not the space fairies.

Corporate taxes are just a way to tax more money from 'the people' while getting idiots like yourself to cheer it on. Every penny comes from increased prices, reduced wages, or reduced income for stockholders.

Look, that's a good argument when you're talking about a utility, or necessities. But an Apple computer is not a necessity, it is a Luxury. Same with the various iDevices. Even if you have a legitimate need for a device which does what they do, there's still a cheaper option that does the same stuff. Your argument simply does not apply. Putting the tax burden on corporations does indeed result in them raising their prices. Then the consumer can see up front the actual cost of their economic activity, and what's more, the person who incurs the cost actually pays it. In short, it by far makes the most sense to tax corporations on this basis! And only idiots cheer when corporations successfully evade taxes. I want Apple customers to have to pay the taxes from which Apple profits, and not every taxpayer in the EU, which is the current situation!

Re:Predictable (5, Insightful)

Anonymous Coward | about a year ago | (#45421329)

it remains to be said that the taxation system worldwide is completely out of control.

That depends massively on your point of view. Overall tax burdens in Scandinavian countries are reckoned to be among the worlds highest yet they also rank very highly for things like happiness, quality of life and medical care, things which are often moderated by tax-funded government schemes and departments. "Out of control" depends on what you think the taxation system should be achieving.

Bottom line is that it doesn't matter whether or not you like the tax system: if you operate in a country then you operate under their tax laws.

Re:Predictable (1)

tstur (38065) | about a year ago | (#45421481)

I agree with your last sentence. Rules are rules. But I'm also suggesting there's a larger problem.

Also, certain things don't scale well. It's conceivable the system that works so well in Scandinavia won't work in more populous countries.

Re:Predictable (0)

Anonymous Coward | about a year ago | (#45421621)

> Rules are rules.

Yes, they are. That doesn't make them moral, ethical, constitutional, or safe.

Re:Predictable (2)

Anonymous Coward | about a year ago | (#45421713)

Why? More populous countries have the advantage of actually having enough people to really benefit from, say, mass transit. The economics of scale come into play. And if they work in the wrong direction you can always just divide the area up to scandinavian country sizes chunks that operate separately. What is the reason scandinavian model won't work with more people? And don't give me crap about "US is a huge, densely populaten country. So are scandinavian ones. On top of that they maintain their roads through winter months and pretty much guarantee the availibility of electricity and internet to every place in their countries)

Re:Predictable (1)

I'm New Around Here (1154723) | about a year ago | (#45421833)

Also, certain things don't scale well. It's conceivable the system that works so well in Scandinavia won't work in more populous countries.

Oh no, you aren't allowed to make this argument on Slashdot. For some reason, there is a visceral hatred from some people if you point that out.

For what it's worth, Sweden is Europe's 5th largest country, behind Russia, Ukraine, France and Spain, and is larger than California. The bulk of its 10 million people live in the southern third of the country, with a few northern cities dotting the eastern coast, and one inland. So government programs and businesses can serve most of the people quite easily.

Re:Predictable (1)

Carewolf (581105) | about a year ago | (#45422517)

Also, certain things don't scale well. It's conceivable the system that works so well in Scandinavia won't work in more populous countries.

It is not a question of size it is question of trust, and ultimately corruption. The people need to trust the government and the government need trust the people and corrupt entities should feel ashamed of what they are doing, so society at least has the _appearence_ that corruption is abnormal (increasing trust, which lowers corruption which increases trust...)

Re:Predictable (0)

Anonymous Coward | about a year ago | (#45421493)

if you operate in a country then you operate under their tax laws.

exactly, and that includes using their tax laws to minimize your taxes to lowest legal level possible

Re:Predictable (0)

Anonymous Coward | about a year ago | (#45421683)

Well, you need to be careful when you get too close to that line, because if you cross it you wind up in jail.

Re:Predictable (2)

AmiMoJo (196126) | about a year ago | (#45421661)

Some people think they have a right to make a profit. They are wrong. We have a right to decide who gets to operate a business in our society and under what terms. If they don't want to contribute back to what we have built we have the right to deny them access.

Re:Predictable (1)

DNS-and-BIND (461968) | about a year ago | (#45421753)

This sounds chillingly like, "Shut them all down, comrade"...am I right?

Re:Predictable (1)

AmiMoJo (196126) | about a year ago | (#45421813)

No, it's simply "pay your taxes or fuck off". Companies will, when forced to, always choose to pay their taxes because they can still make a profit, just less of a profit.

Re:Predictable (1)

0123456 (636235) | about a year ago | (#45422001)

No, it's simply "pay your taxes or fuck off". Companies will, when forced to, always choose to pay their taxes because they can still make a profit, just less of a profit.

Yes. They'll just increase prices, so you pay more and the extra money is sent to the government. Or they'll cut wages, so you earn less and the extra money is sent to the government.

If you want to give more money to the government, you could just send them a cheque and cut out the middle-man.

Re:Predictable (1)

dkf (304284) | about a year ago | (#45422331)

They'll just increase prices, so you pay more and the extra money is sent to the government. Or they'll cut wages, so you earn less and the extra money is sent to the government.

Except there may be legislated minimums on pay rates, and increasing prices may result in a lower level of sales. Or it might not; some goods become more desirable as they become more expensive (typically because the real reason they're bought is to show that the purchaser can afford them; this is stupid, but definitely happens with some goods). But for all that, corporations have been acting like they believe it is their right to pay as little tax as they can get away with, doing tricks like setting the licensing charges for something to exactly match the profits that would otherwise have taxes paid on them. (That's a trick that always smelt very wrong to me, and it appears to be pretty common.) It sounds like the Italian tax authorities are going to try to clamp down on this.

Re:Predictable (1)

moronoxyd (1000371) | about a year ago | (#45422453)

If taxes are reduced, will companies pay better wages, decrease their prices, hire more people?
Hell no! They will still outsource everything, reduce wages and pay the upper management more for increasing profits.

Re:Predictable (1)

Xest (935314) | about a year ago | (#45422109)

No you're not.

He's just saying that if a company does not exist for the betterment of society in general, then there's no point letting it exist at all.

This policy in fact aids capitalism, because it means companies must compete on the merits of their product, rather than their ability to find loopholes in the law.

For example, Amazon in the UK basically pays no tax but it does get the benefit of UK educated works and does get to use UK roads causing wear and tear and the publicly subsidised postal network. This makes it a net drain on society (the jobs it creates and the taxes paid on those wages don't make up for it's overall cost to society) meaning it's subsidised by the public which is anti-capitalist and so at that point the public should have the right to have the company shut down if it's not willing to pay it's own way or can't compete on it's merits without this kind of indirect subsidy.

who forgot ... (1, Interesting)

dltaylor (7510) | about a year ago | (#45421373)

I suspect the hottest question around Apple today is "who forgot to pay the Parliament's members bribes?" (or, at least, make the appropriate "campaign contributions", as we prefer to call them here in the USofA).

To be fair (0)

clickclickdrone (964164) | about a year ago | (#45421407)

The Italian's main complaint was Apple weren't dodging taxes enough and making the mob run companies look bad.

Wanted (1)

ThatsNotPudding (1045640) | about a year ago | (#45421637)

A crisply-produced short commercial of a Three Card Monte game involving Dollars, Pounds, and Euros backed by a jaunty piano soundtrack.

Apple. Steal Different.

This is how you know (1)

erroneus (253617) | about a year ago | (#45421649)

These things have been going on since forever and it has always been a well-known secret. But as times get increasingly desperate, governments and banks get increasingly worse about trying to squeeze money through taxes and fees respectively.

But this is how you know when things are about to turn bad. Just as with the 2008 collapse, weird things were going on with banks. "Economists" on the news would stand up there claiming everything is doing well and that anyone who says different is a nut job. And what did I read the other day? Something about letting banks, once again, repackage risky debt into commodities again? We know that's a huge part of what went wrong in the first place. So why do it again? They know the end is close and they are just trying to get their last bit before things shut down finally.

Yeah, I know... all doom and gloom. But just because the truth tastes bad doesn't mean it's not the truth. We've seen it before. We saw what they did. We see they want to do it again. What does anyone THINK is going to happen?

common practice (1)

Tom (822) | about a year ago | (#45421751)

Every large corporation does it, and there are tons of lawyers and tax consultants who specialise in exactly this kind of stuff.

It's probably the largest organized crime in the history of mankind, except that through lobbying or sometimes outright bribery, it's actually legal. Well, it's borderline legal, and you get cases like this every time a tax consultant became a tad too creative and crossed the line.

But it's theft, plain an simple, and every idiot who cheers the corporations should hold it for a second and think about who is going to pay for the missing taxes. Yes, that's right, same idiot. If you wonder why your taxes have been increasing, it's because corporate taxes are dropping. If not on paper (though in many countries there as well) than in reality through tax evasion.

It sounds like the issue is where sales are made (1)

usuallylost (2468686) | about a year ago | (#45421799)

They don't explain the nature of the tax dispute in any detail in the article. What they do say makes it sound like the source of the dispute is that people are ordering Apple products in Italy and the orders are being fulfilled by their subsidiary in Ireland. So the profits are getting booked in Ireland vs. Italy because that is the unit that made the sale. It goes on to say that there is a proposal by the government of Italy to force any company that advertises in and sells online in Italy to do its order fulfillment via "agencies with a tax presence in Italy". I am somewhat sympathetic to countries trying to capture tax revenues from business in their countries. I am far less sympathetic to the idea that they are going to place local presence requirements in order to do online business in Italy. If every country did that it would pretty much end international online sales for anything but the largest companies. Places like Apple and Amazon who can afford, and indeed probably already have, local presence or partners. It will totally screw smaller Internet based merchants that don't have such a presence.

Re:It sounds like the issue is where sales are mad (3, Informative)

gl4ss (559668) | about a year ago | (#45421915)

there's no issue about where the sales are made actually in this.

what they have done is artificially move the on-paper profits to the ireland based entity - which is owned by the same people. sales are done in italy, but they're claiming that they make no profit from the sales in italy because they (on paper only, mind you, it's not like they're actually ferrying the shit through ireland) buy the devices at retail price from the another entity in the business which is based in ireland.

why is it important to squash this practice eventually? well doh, there wouldn't be any taxes to be paid on any corporate profits stemming from sales anywhere else than ireland in europe if they don't do something about it(the alternative is in practicality to raise VAT so that all corporate profits taxing comes from VAT... which might not be that bad of an idea, alternatively force ireland to change it's laws to stop acting as a tax haven stopgap for this purpose)..

"ASI contracts with mainly Chinese companies to manufacture iPads and iPhones. ASI then sells these products to another Irish company which resells them to retail subsidiaries in Italy and other European countries.

The pricing of the inter-company transactions ensures that the lion's share of the profit ends up with ASI, the Senate report said. Low profits in countries like Italy mean low tax payments there."

Say it ain't so (0)

Anonymous Coward | about a year ago | (#45421869)

Apple not paying its share. Oh the humanity of it all! I just wonder when people will finally go to those Apple anonymous meetings and get off the Apple juice.

Netherlands has the same situation. (1)

dexpetkovic (3431737) | about a year ago | (#45422125)

By some reason, I came across a writing on a Dutch Apple store website in which it says that VAT on software is 23%. Knowing that the VAT in the Netherlands is 21%, I read the disclaimer and the tax is 23% to all services. The services include software and once purchased, sw is "shipped" from Ireland. Maybe the Dutch have arranged it differently. I am not sure if Dutch Apple subsidiary is paying taxes to Dutch or Irish state, since the below statement does not clarify that: Excerpt from http://store.apple.com/nl/help/payments [apple.com] "Voor klanten van Apple die in de Apple Store elektronische softwaredownloads bestellen of andere producten die worden aangemerkt als diensten, geldt een btw-tarief van 23%. Elektronische softwaredownloads worden beschouwd als dienstverlening, en niet als product. Aangezien de dienst wordt geleverd vanuit Ierland, geldt een btw-tarief van 23%." translated: "For Apple customers who order from the Apple Store Electronic Software Downloads or other products classified as services, applies a VAT rate of 23%. Electronic software downloads are considered as services, and not as a product. Since the service is supplied from Ireland, a VAT rate of 23% applies."

Re:Netherlands has the same situation. (1)

RotateLeftByte (797477) | about a year ago | (#45422369)

No tax evasion here.

If the order is fulfilled from the servers that reside in Eire then you pay the VAT applicable for Eire.
There is a space on the VAT form to record the VAT you have collected on behalf of other EU countries.
I have the same gripe with Adobe. Buy a DVD and you pay 20% because it is shipped from Scotland(I'm in the UK). Download it and you pay 23% because their servers are in Eire.

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