Apple has agreed to pay 10 years of back taxes to France, marking the latest victory for European governments pushing tech multinationals to pay their fair share in local markets.
The iPhone and iPad maker reportedly shelled out close to €500m (£440m) after reaching a confidential settlement with French authorities in December, according to the French news magazine L’Express.
Apple has not disclosed the size of the settlement, but said in a statement: “The French tax authority recently concluded a multiyear audit of our French accounts and the adjustment will be reflected in our publicly filed accounts.
“We know the important role tax payments play in society and we pay all that we owe according to tax laws and local customs wherever we operate.”
American tech firms such as Apple have been heavily criticised for the small amounts of tax they pay in EU countries including France and the UK relative to the billions of pounds in sales they report in these states.
The chancellor, Philip Hammond, recently announced plans to introduce a special digital services tax by 2020 on online firms making more than £500m globally per year. It’s expected that the tax would raise more than £400m annually for government coffers.
France is also introducing its own “GAFA tax” – referring to Google, Apple, Facebook and Amazon – which would affect tech companies with global sales of more than €750m and €25m in France. That law would be retroactive to 1 January and is expected to raise €500m this year.
The country’s settlement with Apple follows a spate of successful challenges launched by European authorities over unpaid tax in recent years.
In 2016, Apple was ordered to pay €13bn in back taxes to Ireland by the European commission, which said the company paid a tax rate of just 0.005% on its European profits two years earlier.
Amazon also ended a protracted battle with France in 2018 after agreeing to pay the state €200m and saying it would start to declare all its earnings in the country.