Google to pay $334 million to settle Italian tax dispute

Pablo Tucker
May 4, 2017

Tech giant Google agreed to pay $334 million to the Italian government to cover a back tax bill, the latest settlement by a USA tech company for business in Europe.

Italian tax police alleged a year ago that Google had not paid about 1 billion euros of Italian revenue between 2009 and 2013.

Italy's tax agency said talks would begin on signing "preventive agreements" to ensure the company pays the correct tax in the future.

"The settlement with Google's Italian and Irish subsidiaries covers the 2002 to 2006 and 2009 to 2015 periods".

"In addition to the taxes already paid in Italy during those years, Google will pay another 306 million euros", the statement said. Google's parent company Alphabet Inc has been in the firing line for booking income from higher-taxing markets in Europe through Ireland's lower tax regime.

French tax authorities have also been chasing Google, and police have raided its offices in the country.

Google confirmed it had reached an agreement with the authorities without commenting on whether it accepted the revenue's calculations. That dispute is related to the company's channelling earnings through Luxembourg.

"Corporate tax is based on profits, not revenues, and our profits have remained low given our heavy investments and the fact that retail is a highly competitive, low-margin business", said Amazon, which has invested EUR800 million in Italy since 2010.

American lawmakers, meanwhile, are demanding that US-based multinationals repatriate more of their profits and pay taxes on them.

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