After an extensive audit by UK tax body HM Revenue and Customs (HMRC), Apple Europe has agreed to pay over £137 million (around $185 million) in extra taxes, reports The Guardian. The payment includes interest on unpaid tax, covering several years until September 2015.
Apple operates two primary subsidiaries in the UK called Apple Europe Ltd and Apple Retail UK Ltd. Apple Europe Ltd provides marketing, financial and support services, while Apple Retail UK Ltd runs Apple’s online and physical stores across the UK. The Guardian notes that Apple Europe reported a pre-tax profit of £297 million in the 18 months to April 1st, 2017. It paid taxes of £57 million during that period and the £137 million in back taxes. Apple Retail UK made £17.6 million in pre-tax profits on more than £1 billion in turnover, and paid taxes of £13.8 million for the 12 months to September 2016, according to The Guardian.
In a statement Apple said:
“We know the important role that tax payments play in society. Apple pays all that we owe according to tax laws and local customs in the countries where we operate. As a multinational business and the largest taxpayer in the world, Apple is regularly audited by tax authorities around the world. HMRC recently concluded a multiyear audit of our UK accounts and the settlement we reached with HMRC is reflected in our recently filed accounts.”
Apple further notes that the amount “covers corporate income tax for prior years due to the increased activity in our business in the UK.” While the £137 million sum can be seen as relatively small, it’s still notable given that Apple has maintained it always pays its taxes. Apple says its effective tax rate on foreign earnings is 21 percent, and that rate has been consistent for many years. It also says it is the largest taxpayer in the world, paying $35 billion in corporate income taxes in the past three years.
Tim Cook has previously said in a heated interview that Apple “pays every tax dollar we owe,” calling tax evasion claims against the company “total political crap.” In December, Apple agreed to pay Ireland $15.4 billion in back taxes to appease the EU, though that decision is being appealed.
Update 10/01/17, 11:10am ET: Added additional comments from Apple.