Italy Says NO to Multinational Tax Loopholes
Apple, Inc. has been in hot water for its creative tax accounting many times over the years. Yet this company and other large multinationals continue to get away with making billions in profits while paying very little in taxes. Now, Apple is stirring up tax controversy again, this time in Italy. The company is facing allegations of hiding over $1 billion from Italian tax authorities. How are they doing this?
The simple answer is: other foreign subsidiaries. Apple booked some of its profits through its Irish subsidiary, which drastically lowers the taxable income in Italy and allows the income to be taxed at the lower Irish rate. The world has known for years that multinational corporations do this. Perhaps Italy and other countries under financial distress are becoming more aggressive with such companies. Apple is certainly no newcomer to such allegations. The company is scrutinized and often audited by countries around the world.
“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 multinationals that are able to lower their tax base through their international operations.”
We can expect to see similar actions in the future. Receive more details about the case at Reuters: http://www.reuters.com/article/2013/11/13/us-apple-italy-tax-idUSBRE9AC0RW20131113