Apple's CEO Tim Cook announced on Wednesday, Sept.9, that the famed brand's revenue significantly increased in China by up to 75 percent in the past year. However, the country's finance authorities cut the celebration short.
China's Ministry of Finance demanded Apple to pay 452 million yuan, a price equivalent to $71 million, for its purportedly unpaid taxes in 2013, according to Xinhua News Agency, the country's official press publication. The same authorities also demanded around 65 million yuan or $10 million as fine in late fees.
"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," an Apple spokesperson said. "We pay all taxes we owe wherever we do business."
Reports say the Chinese subsidiary allegedly failed to list revenues and expenses for that year by understating revenues by over 8.8 billion yuan (around $1.4 million) and expenses of 3.4 billion yuan (around $532,000). Profits have also been overstated by 5.4 billion yuan (around $846,000).
The People's Republic is said to become stricter on tax collection since last year. Even Microsoft didn't escape the tax collection grip, as it was ordered to pay $137 million in November 2014.
The investigation surrounding taxes highlighted the battle of the country against foreign companies that are allegedly underpaying taxes. This is after the officials reported to cease the practice in December 2014.
On February 2015, the country imposed careful and stricter assessment policies on taxes coming from transnational corporations.
Apple outlets in China welcomes long queues of buyers whenever a new product is going to hit the market. However, the Californian tech brand has also been a target of local media, attacking its return policies and customer service, particularly in 2013. This resulted to the media demanding an apology from Cook.
According to the company, iPhone sales, particularly the sales of its iPhone 6 as well as iPhone 6 Plus alone, peaked by up to 85 percent in Greater China, which includes Taiwan and Hong Kong. This surge resulted to $13 billion worth of revenue in the quarter ending on June 27, a report says, tagging the Greater China region as the second-largest market of the Californian tech giant next to the Americas.
Photo: redjar | Flickr