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Apple Settles Tax Dispute With Italian Authorities

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An Apple Store in Florence, Italy, in 2014. The company has settled a dispute with Italian tax authorities. Credit Maurizio Degl Innocenti/European Pressphoto Agency

Apple has reached a deal with the Italian authorities over a dispute about how much tax the American technology giant should have paid in the European country.

A spokesman for Italy’s tax authority declined to comment on the size of owed taxes, though local news reports suggested that the figure could reach as much as $ 350 million.

The investigation, which dates to 2013, examined whether Apple had moved roughly $ 1.1 billion in revenues from its Italian operations through an Irish subsidiary to lower the taxes that the company was obliged to pay in Italy.

A representative for Apple was not immediately available for comment.

Apple’s issues in Italy are the latest problem that the company has faced in Europe. The authorities are also investigating whether it had received an overly generous tax deal in Ireland, where the company has large operations.

That separate investigation by the European Commission, the executive arm of the European Union, is expected to make its judgment in early 2016 and forms part of a growing crackdown by European officials on the tax dealings of many American international companies operating in the 28-member bloc.

In October, for instance, Europe’s antitrust authorities ordered the Dutch government to recover money from Starbucks after allegations that the Netherlands gave the coffee retailer illegal state aid by letting it shift profits and pay lower tax rates than those available to other companies. Starbucks is appealing the ruling.

Amazon and McDonald’s, whose European operations are based in low-tax Luxembourg, are also facing similar inquiries into their tax dealings. The companies have denied any wrongdoing.

Apple, which has repeatedly denied allegations that it does not pay enough tax in certain countries where it operates, is just one of a number of American companies that have used Ireland as a base for its international headquarters.

Ireland’s corporate tax rate, at 12.5 percent, is one of the lowest in the Western world, compared with a rate of 35 percent, before deductions, in the United States, though Irish officials deny that the low-tax structure represents unfair competition.

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NYT > Technology

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