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Italian Judge OKs $50,000 Fine in Place of Jail Sentence for Apple Exec in Irish Tax Probe

Italian Judge OKs $50,000 Fine in Place of Jail Sentence for Apple Exec in Irish Tax Probe

An Italian judge has OK’ed a nearly $50,000 settlement agreement that would see the head of Apple’s Ireland-based division paying the fine as part of a 2015 investigation into charges that the U.S.-based iPhone maker failed to pay taxes in Italy.

Italian Judge OKs $50,000 Fine in Place of Jail Sentence for Apple Exec in Irish Tax Probe

Reuters:

Under the settlement agreement, a six-month jail sentence for the executive has been converted into the payment of a 45,000 euro ($49,126) fine, the source said.

Under Italian law, a settlement agreement does not imply an admission of guilt.

The original investigation, which ended in March 2015, delved into accusations that Apple booked profits generated in Italy through its Irish subsidiary, thereby lowering its taxable base income, saving 879 million euros ($959.43 million) in taxes from 2008 through 2013.

Apple had claimed the allegations against its employees were “completely without merit,” when the investigation was revealed. However, December 2015 saw a report that Apple has agreed to pay 318 million euros to Italy to settle the case. (Under Italian law, paying a settlement does not imply an admission of guilt.)

As a part of the deal, prosecutors in Milan have also asked that the case against two managers employed by the Italian branch of Apple be dropped.

Apple Italia is headquartered in Ireland, which allows Apple to pay a significantly lower corporate tax rate than they normally would. Italy has a standard corporate tax rate of 27.5%, while Irelands stands at only 12.5% for normal business activities.

Apple’s European tax policies have come under scrutiny in recent years, with an August ruling by the European Commission finding Apple had received illegal state aid from Ireland by basing their European operations in that country. Apple is said to have only paid between 0.005% and 1% in taxes in Ireland between 2003 and 2014, compared to the the country’s usual 12.5% corporate tax rate.

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