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Apple To Pay £235m To Settle Italian Tax Row – Report

Tom Jowitt is a leading British tech freelance and long standing contributor to TechWeek Europe

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Settles corporate tax row with Italian authorities, and pledges agreement on tax liabilities going forward

Apple has opted to settle a corporate tax dispute with the Italian tax office, and will reportedly hand over 318m euros (£235m).

The iPad maker had faced allegations that it had failed to pay corporate taxes to the tune of 879m euros (£649m).

Settlement Deal

To settle the dispute, the American tech giant apparently agreed to pay 318m euros (£235m), Reuters quoted a source with direct knowledge of the matter.

In addition, Apple will sign an accord next year on how to manage its tax liabilities from 2015.

“Apple will pay the tax agency 318 million euros and will sign an accord for fiscal years 2015 onwards early next year,” the source was quoted as saying.

TaxesThe Italian tax office had earlier confirmed a report in La Repubblica that it had reached a deal with the iPhone maker, but declined to say how much Apple had agreed to pay.

And it seems that the judicial probe into the matter will remain open for now, but the settlement will be treated positively by Italian authorities.

Italy kickstarted its investigation into Apple because of the way it attributed its profits generated in that country. The profilts were booked by its Irish subsidiary, allegedly in order to reduce its taxable income.

Reuters’ sources have previously indicated this policy allowed Apple to save just under 900m euros (£664m) in the 2008-2013 period alone.

Tax Scrunity

It should be noted that Apple is not alone in facing increasing scrutiny from European tax authorities. Google, Amazon and other tech firms are also the subject of tax inquiries in Europe for example.

But Apple is one of the leading tech players and its tax affairs are being actively investigated by the European Commission.

In the past Apple allegedly avoided hefty tax bills by declaring companies registered in the Irish city of Cork, as not tax resident in any country. Apple has been accused of avoiding about $40bn (£25bn) in US income taxes in 2012 alone, using this method.

In 2013, Apple was forced to defend its US tax arrangements after being labelled as one of America’s largest tax avoiders by a Senate Committee.

The Senate Permanent Subcommittee on Investigations claimed that Apple at that time had cash reserves of $145 billion (£95bn), of which $102 billion was located in offshore accounts to avoid paying billions of dollars in taxes in the US.

There was no suggestion that Apple was doing anything illegal, and CEO Tim Cook has previously blamed the US tax system for the issue.

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