Apple confirms its under review by Italian tax authorities, denies wrongdoing


An Apple Inc. logo hangs above the entrance at the Fifth Avenue store in New York, U.S., on Friday, March 11, 2011. (Jin LKee/BLOOMBERG)

Apple confirmed Wednesday that Italy is reviewing the company’s tax returns amid claims ithas not paid everything it owes .

In a statement, company spokeswoman Kristin Huguet said that Apple is aware of the review and “confident” that it will find the firm is in compliance with all Italian tax regulations.

According to a report by Reuters, two unidentified judicial officials with knowledge of the matter said the Italian government is looking into claims that Apple may have hidden more than $1.3 billion in revenue from authorities. The officials told Reuters that Apple had lowered the amount of its taxable income in Italy by recording some of its profits under an Apple subsidiary company in Ireland.

The tech giant denied the allegations. “Apple pays every dollar and euro it owes in taxes, and we are continuously audited by governments around the world,” Huguet said.

“The Italian tax authorities already audited Apple Italy in 2007, 2008 and 2009 and confirmed that we were in full compliance with [international standards] ,” she said. “We are confident the current review will reach the same conclusion.” Huguet said that its practices are in line with standards set by the Organization for Economic Cooperation and Development, a group of leading developed nations for multinational enterprises.

Apple has come under fire in the United States over its tax practices, particularly as they relate to overseas subsidiaries. In May, Apple chief executive Tim Cook was called before the Senate’s Permanent Subcommittee on Investigations to defend Apple’s strategies for reducing its tax bill after a Senate report accused the firm of using a “complex web” of offshore entities to shave its tax bills. The strategies included moving profits to subsidiaries in Ireland and elsewhere — tactics that lawmakers said were exploiting loopholes in tax law.

Cook defended the company’s tax practices and told lawmakers that Congress should lower the overall U.S. corporate tax rate. While he did not deny many of the Senate’s accusations, he said that the firm pays everything it owes in taxes and doesn’t “depend on tax gimmicks.”

Italian tax authorities recently have stepped up their efforts against high-profile firms that it suspects aren’t paying their fair share of taxes. In June, an Italian court sentenced fashion designers Domenico Dolce and Stefano Gabbana to more than a year in prison for tax evasion. According to the Associated Press, the co-founders of the label Dolce&Gabanna denied any wrongdoing and planned to appeal the decision.

Hayley Tsukayama covers consumer technology for The Washington Post.

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