Google Agrees to Pay $335 Million in Italy Tax Dispute

Posted May 06, 2017

The Italian dispute continues a trend in recent years among European authorities in paying close scrutiny to the tax activities of multinationals such as Amazon.com Inc. and Starbucks Corp.

Tax officials said the settlement also launches a process to determine Google's proper taxation level in Italy going forward. A Google spokesman said the deal "resolved without disputes investigations relating to the period between 2002 and 2015".

Italy's settlement contrasts with a deal that the United Kingdom struck with the multinational last year, which received fierce criticism after it was agreed that Google would pay only £130m back in tax covering a 10-year period.

Nearly 303 million of the 306 million paid by Google to the Italian authorities has been attributed to Google Italy while the other 3 million is attributed to Google Ireland.

Google agrees to pay US$335 million (AU$453 million) back taxes in Europe. "We need firmer global rules governing digital companies and better dialogue between countries where they operate".

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The European Commission, which administers EU law, said the Irish government helped the tech giant artificially lower its tax bill for more than 20 years. Apple paid €318m for taxes due between 2008 and 2013.

However, at the end of 2016, France's Constitutional Council ruled against a new measure, dubbed the Google Tax, that would tax "diverted profits" up to 60 percent.

Finance minister Michel Sapin said a year ago that France wouldn't negotiate with Google, but would instead pursue the company through the courts.

The French government said it wanted to make it more attractive for foreign businesses looking for a new European location after Brexit.