Apple stung with Euro tax bill

Cupertino-based vendor left red-faced after Italian investigation ruled it had underpaid tax over a five-year period

Apple’s Italian subsidiary has agreed to stump up €318m (£235m) to the authorities after an investigation into tax fraud allegations.

According to an article on La Republicca, Italy’s tax authorities said the firm failed to pay €880m in tax between 2008 and 2013.

Investigators in Italy were reported to have found a significant gap between the company's revenues in Italy of over €1bn between 2008 and 2013 and the €30m that was actually paid in tax in the country.

The firm’s European operation is based in Ireland, which has one of the lowest corporation tax brackets in the world. Ireland taxes corporate earnings from normal business activities at a rate of 12.5 per cent compared with 27.5 per cent in Italy.

Tim Cook, chief executive of Apple, rejected accusations that the firm has been avoiding US taxes by stashing cash overseas, claiming "We pay every tax dollar we owe."

The settlement comes in the middle of a European Commission investigation into the tax arrangements of numerous multi-national companies accused of using cross-border structures to reduce their tax bills.