Apple’s Irish arm accused of involvement in €1bn tax fraud

Italian finance police and Milan magistrates yesterday accused Apple Sales Ireland (ISA) of involvement in a €1.06 billion Italo-Irish tax fraud.

Following a recent raid on Apple Italia’s Milan headquarters, investigating magistrates Francesco Greco and Adriano Suderi alleged that Apple Italia had redirected the proceeds from its Italian sales to its Irish subsidiary, avoiding at least €1.06 billion in tax payments.

It was not possible to contact Apple Ireland’s media helpline about the accusations last night. Nor did Apple Italia respond to enquiries.

Apple manages to pay a very low level of tax thanks to what one commentator last night called a “legal exploitation” of badly designed Irish tax law.

In particular, Apple has in the past been able to rely on three subsidiaries "incorporated" in but not "resident" in Ireland for tax purposes.

Systematic abuse
Last month, Minister for Finance Michael Noonan promised measures would be introduced to stop systematic abuse of the Irish tax system.

The issue is especially topical in Italy given that the present Italian budget legislation, known as the "Stability Law", contains a so-called "Google Tax" proposal: the fundamental principle being that profits made in Italy should be taxed in Italy.

Given that more than 3,000 amendments have been registered in relation to the Stability Law, it is currently unclear as to whether the “Google Tax” proposal will be passed.