SACEM, which is the French organization charged with managing royalties paid to authors, has accused Apple of failing to pay €5 million in royalties taxes on 2011 iPad sales. The tax apparently was collected, but Apple didn't pass the money on to SACEM.
France to Apple: You owe €5 Million in iPad taxes
The tax, or copy privée, is collected on devices that can display or create copyrighted materials, which includes Apple's iPad. Once collected, that money goes to SACEM (The Society of Authors, Composers, and Music publishers) who then distributes it to people involved in the content creation such as authors, musicians, actors, and producers.
In this case, it looks like people that bought iPads in France paid the tax, but Apple neglected to then pay that money to SACEM. Since the money was collected, Apple and France will now have to figure out exactly what happened. What seems likely is that an oversite at some point during the accounting process stopped the money from making it to its final destination.
Apple found itself in a U.S. Senate hearing last month where lawmakers have been looking into corporate tax practices. Senators John McCain (R-AZ) and Carl Levin (D-MI) used the hearing to accuse Apple of improperly sheltering money from taxes, but CEO Tim Cook denied the claim. He stated,
We pay all the taxes we owe – every single dollar. We not only comply with the laws, but we comply with the spirit of the laws. We don't depend on tax gimmicks.
He went on to say that if Congress doesn't like the amount of taxes companies pay, they need to change the laws.
Presumably Apple is looking into the SACEM claim that it didn't pay iPad royalty taxes in 2011.
[Thanks to Rude Baguette for the heads up]