Apple, which was accused by the Italian government of failing to declare more than $1.3B of income when paying corporation tax in the country, has now agreed to pay the full €318M ($347M) claimed by the Italian tax office. The company has 16 Apple Stores in Italy.

Apple was accused of funnelling profits from Italian sales through its Irish subsidiary in order to benefit from the lower tax rate the company had agreed there. (Those tax arrangements are the subject of a separate EU investigation.)

La Repubblica (via The Local) reports Apple Italia was listed as a “consultant” for Apple Ireland, enabling the company to book profits through Ireland, paying just 2.5% tax under the terms of an agreement said to have first been reached with Steve Jobs back in the 1980s …

Apple channels most of its European profits through Ireland. It has been suggested that the agreement between Apple and the Irish government, exempting the company from the normal 12.5% paid by most companies, is illegal. An EU investigation into the arrangements has recently been expanded and extended.

Should that ruling go against Apple, the company would have to pay the difference for up to ten years. The company last year warned shareholders of this possibility, stating that the amount would be ‘material’ but that it was unable to estimate the amount. The Financial Times last year estimated it at $2.5B. Apple would not, however, be subject to any fines or penalties: the law would have been broken by the Irish government rather than by Apple.

Apple has always taken the line that it pays every dollar that it owes, Tim Cook recently describing claims that it avoids tax as “political crap.”

Photo: Apple (Euroma2 store, Rome)

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About the Author

Ben Lovejoy

Ben Lovejoy is a British technology writer and EU Editor for 9to5Mac. He’s known for his op-eds and diary pieces, exploring his experience of Apple products over time, for a more rounded review. He also writes fiction, with two technothriller novels, a couple of SF shorts and a rom-com!

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