Tim Cook may have been singing the praises of their China division on stage this week, but its been revealed that Apple China underpaid on their taxes by 452 million yuan ($71 million USD ) dues to reporting errors during their 2013 operations.

According to a report from the Chinese Ministry of Finance on Wednesday, which was released yesterday through state media outlet Xinhua, Apple had already rectified the mistake and was required to pay a further 65 million yuan in late fees ($10.1 million USD).

Apple had apparently underestimated their revenue by 8.79 billion yuan, as well as overstating its profits by 5.4 billion yuan.

This week Apple CEO Tim Cook noted that sales on the iPhone had increased by 75% in China over the past year, making it the biggest market for their flagship. The iPhone 6S is set for release in China on the 25th of September as part of the second wave of releases.

As foreign tech companies gain increasing momentum in the Chinese market the government is stepping up its scrutiny of taxable foreign operations.

In November last year,  they claimed $140 million USD in back taxes from US technology group Microsoft. While they had again employed state media newspaper Xinhua to make the announcement, they redacted the name Microsoft, instead opting to call the company ‘M.’  Microsoft then contradicted the report, claiming the amount was a “bilateral advanced pricing agreement”, and not due to any tax violation on the U.S. company’s part.

Apple has instead confirmed the misreported values, as well as confirming they have paid the back taxes reported by the 2013 audit.


Image Credit: Shutterstock

Cate is a tech writer. She worked as a journalist in Australia, Mongolia and Myanmar. You can reach her (in Chinese or English) at: @catecadell or catecadell@technode.com

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