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Google agrees to pay $335 million in Italy tax dispute

06 May 2017

The Italian Revenue Agency, which opened the investigation past year, said it would now seek to ensure that multinationals operating in Italy would pay taxes in accordance with revenues made inside the country. However, the investigators did not reveal how much they were seeking to recover.

Google has come to an agreement with the Italian tax office to to pay €306mn to settle a dispute.

In 2015, the last year for which accounts are available, Google Ireland generated sales to the value of €22.6bn - about a third of its total income that year - but only paid €48m in tax here. The spokesman said Google "confirms its commitment towards Italy and will continue to help the country's online ecosystem grow".

Google has buckled - again - under government pressure and agreed to pay millions in back taxes in Europe.

Google is now facing another case in France where the authorities believe it owes €1.6 billion in back taxes.

The biggest outstanding dispute in Europe concerns a €13 billion tax bill that Ireland was ordered by the European Commission to assign to Apple.

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Other U.S. multinationals, including and Facebook Inc., are also under scrutiny in Italy.

The U.S. company has previously said it complied with tax rules in every country it worked.

It has defended the legality of funnelling its European earnings through its base in Ireland, which has one of the lowest rates of corporation tax in the European Union.

People familiar with the situation say an Italian investigation into Facebook is also continuing.

Google confirmed it had reached an agreement with the authorities without commenting on whether it accepted the revenue's calculations.

Natalia Drozdiak in Brussels contributed to this article.

Google agrees to pay $335 million in Italy tax dispute