TOKYO: Tokyo authorities have imposed a back-tax of US$118 million on an Apple Inc subsidiary over money transfers to Ireland, reports said yesterday.
The Tokyo Regional Tax Bureau ordered music distribution firm iTunes KK to pay ￥12 billion (US$117.7 million) in unpaid taxes and the firm fully paid the sum, the mass-circulation Yomiuri newspaper and other media said, citing unnamed sources.
The extra tax was imposed on about ￥60 billion that iTunes transferred to Apple in Ireland over two years to 2014, Yomiuri, public broadcaster NHK and other media said.
The Japanese authority found a large amount of profits were transferred from the iTunes company in Tokyo to an Apple subsidiary in Ireland via Apple Japan, Kyodo news agency quoted sources as saying.
The authority argued that the transferred money should have been defined as royalty fees subject to income-tax payments, but the iTunes company did not declare the money as such, Kyodo said.
The bureau said it does not comment on individual cases. Apple Japan told reporters in an e-mail that it had no comment. The press reports came as Apple’s latest iPhone was launched in Japan. Apple’s operations in Ireland have come under scrutiny.
The European Commission, the EU’s competition regulator, last month ordered Apple to reimburse a record 13 billion euros (US$15 billion) in unpaid taxes in Ireland.
In its landmark decision late last month, the commission argued that Dublin handed Apple favorable tax terms that amounted to state aid — illegal according to its rules.
EU Competition Commissioner Margrethe Vestager called Apple’s operations in Ireland a “sham,” designed to funnel revenue from across the globe to avoid paying tax.
Apple chief executive officer Tim Cook criticized the ruling and urged Ireland to appeal it to secure future investments.
