Apple pays $118M tax for underreported iTunes Japan income, report says
Japan's tax authority ordered Apple to pay about 12 billion yen (roughly $118 million) in taxes for improperly reporting earnings associated with its iTunes unit, according to local reports Friday.
Local broadcaster NHK said the Tokyo Regional Taxation Bureau levied the fee after it determined Apple's iTunes arm had not been paying a withholding tax on Japanese earnings, Reuters reports.
While the exact timeframe in which the presumed accounting error occurred is not clear, Apple has since settled the debt. Whether the tax office assigned penalties for the miscalculation is also unknown.
Today's news comes as the tax practices of Apple and other multinational companies fall under intense scrutiny from governments around the world.
The European Commission in August ordered Ireland to collect $14.5 billion in back taxes from Apple. The executive body deemed the low tax rates afforded Apple by the Irish government amounted to illegal state aid. Both Apple and Ireland plan to appeal the decision.
Not coincidentally, Apple diverted profits from iTunes Japan to its international operations in Ireland, a provision allowed for by assigning software licensing control to offices in Dublin rather than Japan.