Apple Inc. is going to pay $348 million to Italian tax authorities to settle the dispute in the allegations that Apple has failed to pay taxes for the last six years.
According to the report from Reuters, a source with direct knowledge regarding the matter said that Apple is under investigation by Italian prosecutors because of the allegation that the Tech giant has failed to pay corporate taxes to the tune of 879 million euros in 2008-2013 by reducing its taxable income when it booked profits generated in Italy through its Irish subsidiary.
"Apple will pay the tax agency 318 million euros and will sign a new tax accord for fiscal years 2015 onwards early next year," the source said on Reuters.
New York Times reported that the move of Italian prosecutors to investigate the tax revenue of Apple was made to strengthen tax revenue from both local and multinational companies to offset the country's lagging economy.
Italy is the first European country that individually focused on the complicated corporate tax structure of Apple. However, policy makers in France have looked in the tax arrangement of other tech companies such as Google in the past.
This is not the first problem that Apple face in Europe. European Commission, the executive arm of the European Union is also investigating the allegations that apple received an overly generous tax deal ion Ireland.
The European Commission is expected to reach a decision in early 2016 but it is likely that the Irish government would file an appeal to any decision that is going to force the country to recover any owed taxes from Apple in order to protect a low tax regime that has enticed many international companies to set up operations in the country.
Previously, Apple has said that their company is one of the largest taxpayers in the world and they also repeatedly stated that they pay the required amount of tax in the countries where they operate.