Apple is under investigation in Milan for allegedly hiding more than €1 billion from the Italian taxman, according to reports.
"The Apple investigation is under way," a judicial source told Reuters, without giving details.
According to Italian magazine L'Espresso, Milan prosecutors say Apple failed to declare to Italian tax authorities €206 million in 2010 and €853 million in 2011.
In a statement, Apple said: "Apple pays every dollar and euro it owes in taxes and we are continuously audited by governments around the world. 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." The maker of the iPhone is the latest prominent corporation to become the target of a tax probe in Italy amid a global crackdown on tax cheating by multinationals.
In Italy, where tax authorities have become more aggressive in their dealings with global companies, fashion designers Domenico Dolce and Stefano Gabbana in June were handed a 20-month suspended prison sentence and a heavy fine for hiding hundreds of millions of euros in unpaid taxes. Both deny any wrongdoing.
Meanwhile, in October an Italian court ruled in favour of Oscar-winning film star Sophia Loren, putting an end to a 39-year legal dispute with tax authorities.
Earlier this month the Italian government proposed legislation to raise government revenues by making it more expensive for multinational online companies, such as Google, Amazon and Yahoo! to do business in the country.
A bill tabled by the centre-left Democratic Party aims to raise at least €1 billion through a law, dubbed the "Google tax", obliging companies that advertise and sell online in Italy to do so only through agencies with a tax presence in the country.