Irish-based Apple executive spared Italy jail sentence
An Irish-based Apple executive has avoided a jail sentence in Italy after the tech giant agreed to pay a settlement of €45,000 for unpaid taxes in the country.
Michael O'Sullivan, who has worked for Apple for 25 years and oversees filing for some of the company’s international tax returns, faced a potential six-month prison term in Italy as head of Apple's Irish-based unit, Apple Sales International.
The action was brought by Italian prosecutors following a probe which alleged that Apple had failed to pay €879m in taxes in the country.
However, Apple and Italian authorities came to a settlement whereby the six-month jail sentence for the executive has been converted into the payment of a €45,000 settlement.
In Italian law, a settlement agreement does not imply an admission of guilt. Milan prosecutors investigating the allegations have asked for the case against two managers from the Italian subsidiary of Apple to be dropped.
"Michael has agreed to settle this case on behalf of Apple in order to put the matter behind us,” a spokesman for Apple told the Irish Independent. “He has our full confidence and support and remains an important part of our management team in Europe.”
The case was the first of its kind to be brought against any Apple employees in Europe relating to unpaid taxes. Italian prosecutors swooped on Apple's offices in 2013 and alleged that the company's scheme for redirecting revenues to Ireland was illegal under Italian law.
However, Apple says that it adhered to all Italian legal guidance from authorities.
"Apple has always complied with the instructions we received from the Italian tax authorities and during a tax audit in 2012 the authorities again confirmed we were filing our local tax returns correctly,” said the Apple spokesman. “In 2015 the tax authority contradicted its guidance and said they now believed Apple had not filed its returns from the correct entity. When the authorities changed their view we complied.”
The Apple spokesman said that Michael O’Sullivan acted properly at all times.
"Michael O’Sullivan has worked for Apple for over 25 years and has always operated with the highest integrity,” said the spokesman. “He is a valued member of our finance team and his responsibilities include oversight of the team filing some of our international tax returns and other regulatory requirements since 1999.”
Apple's tax arrangements were plunged into controversy earlier this year after the European Commission found that the company owed €13bn in back taxes to the Irish exchequer due to Ireland breaching state aid rules.