U.S. tech giant Apple (NASDAQ:AAPL) reportedly has reached a 318 million euro ($347.6 million) agreement with Italian authorities over allegations of unpaid taxes. On Wednesday, Apple Inc. ended up at 107.32 decreasing by 1.31%.
Milan prosecutors on Wednesday confirmed a report in daily La Repubblica that Apple agreed to pay the sum for the years spanning 2008-2013. The prosecutors said Apple's tax liabilities for the five successive years will hinge on an international ruling on such cases. They declined to give details.
A May 2013 report by the Senate Permanent Subcommittee on Investigations said Apple avoided tens of billions of dollars in U.S. taxes on its income and profits by using a web of offshore entities to cut some of its tax rates to as low as 0.05%.
"We pay all the taxes we owe, every single dollar," Apple CEO Tim Cook testified in response. He also insisted the company doesn't rely on tax "gimmicks" and doesn't "stash money on some Caribbean island."
Independent tax expert Bob Willens said the fact that Apple settled with Italian tax authorities means they're conceding there was something a bit off in the company's European tax arrangements.
"I don't think Apple would have agreed to this sanction if they didn't feel there was something at least questionable in what they were doing," Willens said.
He said that while the sum was just a "nuisance" for Apple, the case did create a reputational problem: "It's not a very positive public relations thing to be branded a serial tax avoider."
Italian state television said the 318 million euros worked out in the agreement is far less than what Italian tax authorities contend should have been paid over those years.
Italian tax authorities have also examined Facebook's (NASDAQ:FB) Milan offices' books. In yet another investigation, Google (NASDAQ:GOOGL) has said it has been working with Italian tax authorities to determine what it might owe.