LONDON, United Kingdom. Apple has agreed to pay €318mn (£234mn) to settle a tax dispute with Italian authorities after the iPhone and iPad maker was investigated for suspected fraud, the country’s tax agency has confirmed.
The US technology giant’s Italian subsidiary and several of its senior executives had been under investigation for fraud over its alleged failure to comply with obligations to declare its earnings in Italy between 2008 and 2013.
According to the Italian daily newspaper La Repubblica, Apple Italia should have paid corporation tax of €880m for the period. But, after months of negotiations, the tax authorities agreed to close the case in return for about a third of that amount.
An Italy tax office spokesman confirmed the newspaper’s report was accurate but would not divulge further details. Apple did not respond immediately to a request for comment.
The settlement comes amid mounting controversy over the tax arrangements of multinational groups which stand accused of utilising complex cross-border corporate structures to reduce tax bills.
Apple Italia is part of the company’s European operation which is headquartered in Ireland, a country with one of the lowest levels of corporation tax in the European Union and where large portions of the group’s worldwide profits have been booked.
Ireland taxes corporate earnings from normal business activities at a rate of 12.5%, which compares with a standard 27.5% rate in Italy.
This month, the Apple chief executive, Tim Cook, described accusations that the world’s richest company was sidestepping US taxes by stashing cash overseas as “political crap” and insisted: “We pay every tax dollar we owe.”
The settlement of the tax dispute will not halt the criminal investigation into the conduct of three Apple Italia executives but will likely reduce the severity of any potential sanctions, La Repubblica said.
Credit: The Guardian (UK)
