Apple Inc. (NASDAQ:AAPL) will have to pay 318 million Euros as penalty after it was found guilty of not paying tax for several years. A couple of days ago, Tim Cook, CEO of the company said that allegations against Apple regarding tax evasion were politically motivated and baseless as his company paid every tax dollar. The sharp reaction from Cook came after Apple was accused of evading $74 billion tax payment overseas.
However, with the Milan-based subsidiary, Apple Italia found guilty of evading tax in between 2008 and 2013, a total tax of $960.5 million, the company will now have to pay a fine of $347.1 million. The Italian tax authorities conducted the investigation and a representative from the tax agency confirmed that the company indeed has been lagging behind in complying with the taxation rules of Italy. La Republican, an Italian news source said that the Cupertino-based tech giant has agreed to pay the pending tax along with the fine.
Technology Companies Involved in Profit-shifting
European legal authorities are trying hard to ensure that the multinationals pay the taxes on time in the countries where they are doing businesses. At present, Italy is investigating several global technology companies having their head bases in nations with low taxation policies such as Ireland. These global conglomerates, purposely establish their head offices in low-tax nations to avoid higher taxes in affluent countries such as Italy with stringent taxation policies.
This process of profit shifting has irked the European Union, which intends to make every multinational working globally, pay its share of tax so that these countries can gain their share of revenue. That is why, in October 2015, the 28 states of EU together decided to share all the tax deals signed with different companies, so that transparency and fairness prevails.
The Starbucks Corporation (NASDAQ:SBUX) and Fiat SpA (ADR) (OTCMKTS:FIATY) have already been asked by EU to pay tax in millions to Luxembourg and Netherlands government respectively.