Apple under investigation by Italian tax authorities for hiding €1 billion: report

US tech giant Apple is being investigated in Italy for allegedly hiding €1 billion from the local tax authority, Reuters reported citing two judicial sources with direct knowledge of the matter.

According to Milan prosecutors, Apple failed to declare to Italian tax authorities €206 million in 2010 and €853 million in 2011, the report quote one of the sources as saying, confirming a report by Italian magazine L'Espresso.

According to the source, checks on the size of the tax were under way.

The Italian subsidiary of the iPhone maker booked some of its profit through Irish subsidiary Apple Sales International (ASI), in a lowering of its taxable income in Italy, according to the source.

"Apple pays every dollar and euro it owes in taxes and we are continuously audited by governments around the world," the company said in a statement. "The Italian tax authorities already audited Apple Italy in 2007, 2008 and 2009 and confirmed that we were in full compliance with the OECD documentation and transparency requirements. We are confident the current review will reach the same conclusion."

The company has become the latest prominent corporation to become the target of a tax inquiry in Italy as a global crackdown targets companies such as Google, Amazon and others from avoiding taxes.

The Cupertino, California-based company, which was fined about €1 million in 2011 and 2012 by Italy's competition regulator in a warranty case, might have used foreign companies for avoiding taxes in Italy, Bloomberg reports citing one of the two people said one of the two people familiar with the case.

Earlier, Italian weekly magazine L'Espresso reported on its website that the case involved Apple's tax payments in Italy during 2010 and 2011.

Bloomberg quoted Kimberly Clausing, an economics professor at Reed University in Portland, Oregon as saying that the shifting of profits by multinational companies was costing the US and Europe at least $100 billion per year in lost tax revenue.