Asia-Pacific News

China says Apple unit underpaid $71 million in tax in 2013

The Apple Store in Grand Central Station in New York City.
Mike Segar | Reuters

A China unit of U.S. tech giant Apple underpaid taxes in 2013 by 452 million yuan ($71 million), according to a report from the country's finance ministry, which comes as China toughens its stance on tax payments by foreign firms.

The Ministry of Finance (MOF) report, dated Sept. 9 but cited by official news agency Xinhua on Thursday, said Apple Computer Trading (Shanghai) had already repaid the taxes as well as paying 65 million yuan in late fees.

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.

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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 finance ministry report said 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.

China levied around $140 million in back taxes from Microsoft at the end of last year.