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Apple avoids executive's prison term in settlement over unpaid Italian taxes

A judge in Milan, Italy has reportedly agreed to a settlement with the head of Apple Sales International in a case over unpaid corporate taxes in the country, which might otherwise have resulted in the Apple executive serving a six-month prison sentence.




Instead, the executive will have to pay 45,000 euros, or about $49,126, a source informed Reuters. Prosecutors have also allegedly asked for a case against two Apple Italy managers to be dropped.

Apple was accused of failing to paying 879 million euros ($959.43 million) in Italian corporate taxes between 2008 and 2013. In December 2015 Apple agreed to pay 318 million euros to settle the dispute, also signing an accord on managing its liabilities from the 2015 fiscal year going forward.

Apple Sales International is based in Ireland, where Apple Inc. funnels much of its international revenue to minimize its tax bills. The European Commission accused the Irish government of extending illegal state aid in the form of preferential tax arrangements, and now both Apple and Ireland are fighting $14.5 billion in back tax collection. E.U. law bars countries from offering tax breaks to one company but not others.

Just last month, the Japanese government ordered Apple to hand over $118 million after failing to pay a withholding tax on its local iTunes earnings.