Tech Giant Receives Another Tax Bill

Japan's Tokyo tax authorities ordered a Apple iTunes unit in Japan to pay $118 million in penalty taxes for failing to properly pay withholding tax on usage rights for software allowing online music and video distribution. Following the series of Apple's tax bills, the EU Competition Commissioner Margrethe Vestager defended the EU's Apple Ireland case during her visit in Washington on September 19.

Local Profits in Global Network

Tokyo Regional Taxation Bureau found that an Apple Inc iTunes unit sent part of the profits it earned from Japanese subscribers to another Apple division in Ireland to pay for software licensing. The company was ordered to pay 12 billion yen ($118 million) in tax by local authorities after underreporting income. According to sources, iTunes K.K., based in Minato Ward, Tokyo, accepted the findings of the Tokyo Regional Taxation Bureau and paid the amount in full.

Two Tax Rulings

The Company's tax bill in Japan came shortly after the European Union has ordered Apple to pay Ireland €13 billion ($14.6 billion) in back taxes over illegal state aid in Ireland. At a press conference at the European Union's Delegation in Washington,  Competition Commissioner Margrethe Vestager said that EU's decision explained that two tax rulings granted by Ireland artificially reduced Apple's tax burden for over two decades.

"Enforcing our rules is just like applying the antitrust and merger rules - you look at the evidence, and you enforce the law. And the aim is the same as with all competition rules - to protect consumers and give all businesses a fair chance, by making sure the market is fair," Vestager said.

Sources: Japan News, Fortune, CNBC, European Commission

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