Apple Under Investigation In Italy For $1.3 Billion Tax Fraud

Apple is under investigation in Milan by Italian authorities for alleged tax fraud. According to a recent report from Reuters, the Cupertino-based company is under investigation for allegedly hiding more than $1.34 billion from the Italian tax authority. A judicial source "with direct knowledge" confirmed local media reports of Apple's alleged fraud. In recent years, tax probes have begun to aggressively investigate tax invasion in Italy. "The Apple investigation is under way," the judicial source told Reuters on Wednesday. Milan prosecutors stated that Apple failed to declare 206 million euros in 2010 and 853 million euros in 2011, one of the sources said, confirming a report by Italian magazine L'Espresso.

Apple was fined $1.2 million in late 2011, following Italian's Competition and Market Authority investigation into AppleCare. Italy implemented the fine after finding that Apple was not providing customers with information about the two years of free product warranty that is required under Italian law. Instead of providing customers with information about the warranty, Apple pushed the sale of their warranty policy, AppleCare.

Apple is the most recent corporation to become the target of Italy's recent aggressive tax probe. The Italian government is in the midst of a global crackdown on tax cheating by multinational corporations. Italian tax authorities also launched an investigation into fashion designers Domenico Dolce and Stefano Gabbana. In June, they were both handed a 20-month suspended prison sentence and a heavy fine for hiding hundreds of millions of euros in unpaid taxes. "There is a global process under way and the Italian tax authority is one of the most active," said an Italian tax source. "In general, the focus is shifting towards multi-nationals that are able to lower their tax base through their international operations."

Apple has had a record breaking year, releasing the iPhone 5s, iPhone 5c, iPad Air, and iPad Mini with Retina Display. The U.S. tech-giants currently operates 14 Apple Retail Store locations in Italy.

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