TOKYO -- Apple's iTunes unit in Japan has been issued a roughly 12 billion yen ($117 million) bill to cover its failure to pay a withholding tax, sources said on Friday. The company has reportedly paid off the amount.
The Tokyo Regional Taxation Bureau found that the company did not pay the withholding tax on earnings it used to cover software licensing fees, the sources said.
The unit was obliged to pay a portion of its profits from the iTunes music and video distribution service to another Apple subsidiary in Ireland, which holds the rights to the content. But in a complex setup, the Japanese unit did not make the payments directly. The fees were instead paid via other related companies, tacked onto costs for purchasing iPhones and other products from the Irish unit.
The Tokyo tax bureau said the Japanese iTunes company paid about 60 billion yen in licensing fees in the two years through 2014.
Apple has yet to comment on the matter.