Italy gets Google to pay $335 million in back taxes

Posted May 04, 2017

Alphabet's Google unit (GOOGL) said Thursday that it will pay $334 million, or 306 million euros to settle an issue with Italy's tax authority.

"With Google a process will be kicked off to come up with preventive agreements for correct taxation in Italy in the future for operations that regard our country", the tax office said.

The settlement also puts an end to separate disputes covering the periods of 2002-2006 and 2014-2015.

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Milan prosecutors in February previous year began a probe of five Google executives including two former presidents of Google Italia over its alleged failure to declare 100 million euros in income and pay 200 million in royalty taxes.

Google said it remained committed to Italy.

Google and other American companies in Europe are often accused of using tricks to avoid paying higher taxes by funneling income through lower tax countries like Ireland.

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Both Google and the Italian tax office said the agreement covered the years between 2002 and 2015.

The company worked out a similar deal with the United Kingdom a year ago, handing over $185 million to British tax authorities. Apple dashed out 300 million euros to Italian authorities in 2015, while Google closed a $185-million deal with the United Kingdom a year ago. Tax police have told Amazon they believe the company has evaded around EUR130 million of taxes in Italy on EUR2.5 billion in sales effected through the company's Italian website between 2011 and 2015, according to people familiar with the matter.

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

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