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  • Apple Reportedly Paid China $71 Million in Back Taxes and Was Fined an Additional $10M

    Last week, the Chinese Ministry of Finance announced that Apple paid out 452 million yuan ($71 million) in back taxes and was given a 65 million yuan fine for understating sales in 2013. According to CNET, the government-owned Xinhua reported that Apple didn’t account for sales worth 8.8 billion yuan ($1.4 billion) in 2013, while overstating profit by 5.4 billion yuan in that same year. In response to this, China’s finance ministry leveled a 65 million yuan fine on top of the 452 million yuan tax bill that Apple owed.

    Apple ended up maintaining that the error was unintentional and resulted from a misunderstanding of Chinese tax law for its part. Apple spokesman, Josh Rosenstock, had the following to say regarding the matter:

    During an audit of our 2013 operations, a difference in interpretation of a tax rule resulted in a balance due, which we paid with interest. We pay all the taxes we owe wherever we do business and we will continue working closely with the Ministry of Finance.
    The tax strategies have come under fire in multiple jurisdictions as the company continues to see unprecedented growth which ends up translating into billions of dollars in revenue each quarter. The particular interest here is Apple’s operations in Ireland, which is the hub of the complicated but legal international revenue processing network that was originally designed to avoid high US tax rates by keeping money overseas in low tax countries. For those of you who didn’t know, Apple has more than $190 billion in offshore capital.

    As of right now, the European Union is looking into what it considers Apple’s exploitation of tax loopholes, all the while the US government is floating its own solutions for getting a cut of Apple’s cash pile. Europe and the US aren’t the only ones together in this. Australia is also targeting Apple in a crackdown on tax avoidance practices.

    Despite the government scrutiny, Apple’s products are seemingly very popular among Chinese consumers. The country plays a key role in Apple’s future growth. Just last month, CEO Tim Cook dispelled rumors of a struggling Chinese economy negatively impacting sales during a rare mid-quarter update.

    We’ll have to see how this whole issue pans out for Apple but at this rate, it isn’t looking too good.

    Source: CNN Money via AppleInsider
    This article was originally published in forum thread: Apple Reportedly Paid China $71 Million in Back Taxes and Was Fined an Additional $10M started by Akshay Masand View original post