1. Skip to content
  2. Skip to main menu
  3. Skip to more DW sites

Apple settling tax fraud case

December 30, 2015

US consumer electronics giant Apple has agreed to pay 318 million euros to settle a tax dispute with Italian authorities following an investigation into allegations that the company dodged payments to the Italian taxman.

https://p.dw.com/p/1HW3x
apple symbol mit kopf
Image: dapd

Apple's Italian subsidiary has agreed to pay 318 million euros ($348 million) to close a litigation case with the country's authorities, the tax office said Tuesday.

Apple Italia and several of its senior executives had been under investigation for fraud over the alleged failure to comply with obligations to declare its earnings in Italy between 2008 and 2013.

According to Italian daily "La Repubblica," the US firm stood accused of shortchanging the Italian taxman to the tune of 880 million euros ($960 million) during this five-year period, by shifting profits to its subsidiary in Ireland, where corporate taxes are much lower. Such practices are common among multinationals, and have come under scrutiny at the European Union level.

However, after months of negotiations between the two sides, the tax authorities agreed to close the case in return for $318 million.

Setting a precedent?

Apple signed the agreement on Tuesday, after the US tech giant accepted "all the findings" raised by the authorities, "La Repubblica" reported. "The finalization of the agreement creates an important precedent, since Apple has other open cases in European Union countries," the Rome-based paper said.

A spokesperson for the tax agency confirmed the newspaper's report was accurate but would not divulge further details. Apple Italia did not respond immediately.

The settlement comes against the controversial backdrop over the tax arrangements of multinational groups who use cross-border corporate structures to reduce their tax bills.

Apple Italia is part of the company's European operation which is headquartered in Ireland, a country whose 12.5-percent corporation tax ranks among the lowest in the European Union.

Earlier this month, Apple CEO Tim Cook described accusations that the world's most valuable company was sidestepping US taxes by stashing cash overseas as "political crap" and insisted: "We pay ever tax dollar we owe."

sri/msh (AFP, Reuters, dpa)