Apple To Pay Italy $347 Million Fine For Alleged 'Double Irish' Tax Fraud Scheme
Unfortunately for Apple, Italy has determined that the company was illegally shielding its taxable income by funneling cash through its Irish subsidiary, and it is forcing the American company to pay dearly. According to Italian prosecutors, Apple skipped out on 879 million euros ($958 million) in owed taxes between 2008 and 2013 with the Double Irish scheme, which allowed the company to take advantage of incredibly low tax rates in exchange for creating jobs in Ireland. So how much did Apple actually pay in Italian taxes during that time period? According to various reports, it was a small fraction of that amount: $33 million.
Although Apple apparently won’t be forced to payback the
full amount that it managed to dodge, it has signed a deal with the Italian
government to settle its case for 318 million euros ($347 million). With Apple
now facing the music in Italy, we wouldn’t be too surprised if other European
Union entities come knocking on Apple CEO Tim Cook’s door asking for big fat
Apple CEO Tim Cook
To add insult to injury, Ireland will shutter the tax loophole that Apple and other American tech companies have exploited for years will have to figure out a new way to lower their tax base by the year 2020. That’s when the loophole will be phased out for companies that are already use it.
We should mention, however, that Apple isn’t just facing criticism for its tax avoidances schemes abroad. The U.S. government is also putting Apple under the microscope for hoarding its cash overseas instead of bringing it back to American soil. For his part, Cook says that repatriating the cash just doesn’t make financial sense.
"It would cost me 40 percent to bring it home, and I don't think that's a reasonable thing to do," said Cook in an interview earlier this month with 60 Minutes. "It's backward. It's awful for America. It should have been fixed many years ago. It's past time to get it done."
Cook also added that “Apple pays every tax dollar we owe." We’re sure that many governments around the world would disagree with that assertion.