China Says an Apple Unit Underpaid Taxes in 2013 by $71 Million

China apple

According to a report from China’s Ministry of Finance (MOF), a China unit of Apple underpaid taxes in 2013 by $71 million (452 million yuan), Reuters reports citing official news agency Xinhua. The finance ministry’s report, which comes as China toughens its stance on tax payments by foreign firms, notes that Apple Computer Trading (Shanghai) Co Ltd had already repaid the taxes as well as paying 65 million yuan in late fees.

A spokesman for Apple said, “During an audit of our 2013 operations, a difference in interpretation of a tax rule resulted in a balance due, which we paid with interest. We pay all the taxes we owe wherever we do business.”

The investigation, however, underlines an increasingly hard stance being taken by Beijing against foreign firms underpaying taxes after authorities said in December they would crack down on the practice.

The report adds that the Apple subsidiary had understated its revenues by 8.8 billion yuan and its costs by 3.4 billion yuan. It had also overstated its profits by 5.4 billion yuan.

Last year, China levied around $140 million in back taxes from Microsoft.

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