Reportedly, Apple will pay the tax office of Italy 318 million euros to settle a dispute which states that Apple did not pay taxes for six years. In order to avoid any such issues in the future, the Cupertino-based company will be signing an accord in 2016 to manage the tax liabilities of Apple in Italy.
The deal comes in the wake of the introduction of a tougher stand by the European Union against profit-shielding arrangements that multinational companies use in Europe.
Prosecutors in Italy have already been investigating the allegations that the tech company has not paid any corporate taxes for the time period of 2008 to 2013 by reducing the value of its income for the period through booking of its profits in Italy through the Irish subsidiary of Apple.
“Apple will pay the tax agency 318 million euros and will sign a new tax accord for fiscal years 2015 onwards early next year,” the source said. The tax office also confirmed a report in La Repubblica newspaper that a deal had been reached with Apple. However, the office did not mention the amount that Apple had agreed to. According to the source, the judicial probe will remain open but the deal will have a very positive impact on the status of the investigation.
Another ruling on European Union’s tax investigation of Apple’s dealings with Ireland is also pending as the European Union accused Ireland of avoiding international tax rules by allowing Apple to shelter its profits, which are reported to be worth tens of billions of dollars, in return for providing jobs in the country. The ruling will also have an important “material” impact on Apple’s presence in Europe if Dublin’s tax policies are shown to provide unfair state aid. Such a ruling will indeed force the company to pay taxes for the past 10 years.
Apple is also being criticized in the United States of America as it has engaged in inversion deals which are instances when companies re-domicile their tax bases to other countries to avoid high tax rates. Indeed, Apple holds almost $181.1 billion in offshore profits and if the money is brought back to the United States the company will owe $59.2 billion in taxes. Indeed, Tim Cook recently denied that Apple will bring its profits to the United States of America as it will be very costly for the company and so it’s not a reasonable thing to do.