Apple 'to pay €318m' to settle Italy tax fraud case Published duration 30 December 2015

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Apple's Italian subsidiary has agreed to pay €318m (£235m; $348m) following an investigation into tax fraud allegations, Italy's tax office says.

Italy's tax authorities say the company failed to pay €880m in tax between 2008 and 2013, according to La Repubblica.

The settlement follows an investigation by prosecutors in Milan.

The US tech giant has not commented on the deal. It has previously denied attempting to escape paying tax owed on profits made around the world.

Apple Italia is part of the company's European operation which is headquartered in Ireland, a country with one of the lowest levels of corporation tax in the EU.

A spokesman for the tax agency confirmed the newspaper's report was accurate but would not divulge further details.

Ireland taxes corporate earnings from normal business activities at a rate of 12.5% compared with 27.5% in Italy.

Investigators in Italy say they found a huge gap between the company's revenues in Italy of over €1bn between 2008 and 2013 and the €30m that was paid in tax in the country.

The settlement comes amid a European Commission investigation into the tax arrangements of numerous multinational companies accused of using cross-border structures to reduce their tax bills, sometimes with the help of secret and potentially illegal "sweetheart" deals.

The issue of Apple's Irish arrangements is separate from but related to the broader one of multinational companies "parking" revenues and profits in low-tax countries.

Apple's activities in the Republic of Ireland are currently subject to that investigation, which is due to announce soon whether tax breaks designed to secure the company's extensive investment in Ireland amounted to illegal state aid.

Apple's European operations have been headquartered in Cork since 1980.

The company is expanding its workforce there to 6,000 and it has been joined in Ireland by other US tech firms including Twitter, Microsoft and Google.

The company's chief executive, Tim Cook, has rejected accusations that the firm has been sidestepping US taxes by stashing cash overseas, insisting: "We pay every tax dollar we owe."