The Tokyo tax bureau said the Japanese iTunes company paid about 60 billion yen in licensing fees in the two years through 2014.
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Treasury Assistant Secretary for Tax Policy Mark Mazur said the government was closing another tax loophole that contributes to the erosion of the USA tax base. Apple Inc and other United States multinationals will face new curbs on tax loopholes under a rule imposed by Washington today, part of a scramble among governments worldwide to bolster their corporate tax bases.
If the decision was to be followed through, it would be a “grievous self-inflicted wound”, according to the Business Roundtable, and would “seriously undermine the sovereignty of European Union member states over their own tax matters and the rule of law”.
In new guidance, the department tightened regulations requiring American businesses to bring foreign profits back home – a process known as repatriation – if they want to get credit for taxes paid in that country.
This isn’t the first instance of tax evasion by the company.
Apple was ordered to repay the massive sum to Ireland earlier this month after an investigation concluded that the tech giant had underpaid tax on its income there.
Last month, the European Commission had slapped Apple with a massive tax bill of $14.6 billion, because the company had avoided paying taxes in Ireland. However, this unit had not been paying a withholding tax on these earnings in Japan.
The EU has been a strong critic of multinational companies such as Apple, Starbucks and Fiat Chrysler that have benefited from keeping their money overseas.
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The Treasury had no comment on whether its notice would have an impact on Apple directly, but a spokesperson said the notice applies to all companies required by a foreign government to pay additional taxes, including those hit by state-aid cases.
