Apple's Japan unit ordered to pay $118 million tax for underreporting income

An Apple iTunes unit in Japan was ordered to pay  12 billion yen ($118 million) in tax by local authorities after underreporting income, media reported Friday.



The unit has since paid the amount, the reports said. The Tokyo Regional Taxation Bureau determined that the unit, which sends part of its profits earned from fees paid by Japan subscribers to another Apple unit in Ireland to pay for software licensing, had not been paying a withholding tax on those earnings in Japan, according to broadcaster NHK.

Apple could not be immediately reached for comment outside of US business hours. The tax bureau declined to comment. Apple and other multinational companies have come under much tax scrutiny from governments around the world. The European Union has ordered Apple to pay Ireland 13 billion euros ($14.6 billion) in back taxes after ruling it had received illegal state aid.

“The Commission’s investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years,” EU Competition Commissioner Margrethe Vestager said.



Apple and Dublin plan to appeal the ruling, arguing the tax treatment was in line with EU law.