Apple is in trouble in Italy for allegedly failing to pay taxes in the country to the tune of $347 million. According to multiple news outlets, the issue stems from a disparity in revenue reported between 2008 and 2013. It is believed in those five years Apple only paid $33 million of the nearly $961 million it should have paid.
The issue stems from Apple allegedly funneling more than $1 billion in revenue earned in Italy to Ireland where the tax rates are just 12.5%, which is one of the lowest rates in the world. The European Union deemed the move illegal.
Apple has agreed to pay the fine, which would reportedly pay its debt as well as some future tax liabilities in Italy. Apple and Italy are also working on reaching a multi-year agreement on future tax liabilities, according to prosecutors in the case.
A deal the company made with Ireland in which Apple exploited a loophole in the Irish tax code to get huge tax breaks in exchange for creating jobs, was deemed illegal by the European Union.
This is not the first time Apple’s business practices have been questioned. The California-based device company has been asked by lawmakers in the U.S. about vast reserves of money the company is keeping overseas. Apple CEO Tim Cook says the 35% tax levy the company would receive for bringing the money home is the key reason for the move. Cook wants lawmakers to reduce that rate in order for it to make business sense for the company.
As of late, the EU has been cracking down on U.S. businesses taking advantage of lower tax rates in other countries. Amazon.com, McDonald’s and Starbucks have all had inquiries from the EU about the practice.
