Apple settles Italy tax-evasion case for $350 million

Apple has agreed to pay about $350 million to settle a tax-evasion case in Italy after a two-year investigation into whether the Silicon Valley company moved more than $1 billion in revenue it made in Italy to its Irish subsidiary.

The deal, announced by Italian prosecutors Wednesday, comes not too long after Apple CEO Tim Cook appeared on “60 Minutes” and defended his company’s tax and offshoring practices — “we pay every tax dollar we owe,” he said — and ahead of an expected decision next year on a separate European investigation into the legality of the company’s tax arrangements in Ireland. EU regulators have accused Ireland of giving special treatment to Apple, as we’ve covered here.

The Italian settlement covers back taxes owed for the years 2008 to 2013, and could have some effect on a criminal tax-evasion investigation involving three Apple employees in Italy, according to the Associated Press.

The deal comes amid a push by European countries to force multinational companies to pay taxes in the countries in which they make money. Many companies, including Silicon Valley tech giants such as Google and Facebook, have their European headquarters in Ireland. Ireland’s corporate tax rate is 12.5 percent, while Italy’s is 27.5 percent, according to the BBC — which points out that Apple has had its European headquarters in the Irish city of Cork since 1980.

Apple has also faced criticism from those who question why it doesn’t bring back its overseas profit to the United States. (Cook, on “60 Minutes,” blamed an antiquated tax code.) Of all U.S. companies, Apple holds the most profit offshore ($181 billion), according to a study released in October by Citizens for Tax Justice and the U.S. Public Interest Research Group Education Fund.

 

Photo from Associated Press

 

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