Google to pay 306 million euros additional tax to Italy

Posted May 06, 2017

The sum, announced on Thursday, also closes other disputes dating between 2002 and 2015. As part of the deal, Google will agree to pay taxes on future income - largely related to advertising sales - generated in Italy, according to Italian tax authorities. Rome alleges Google routed more than EUR1 billion in Italy-based revenue to its office in Ireland, where tax rates are far lower.

Last year Google also agreed to pay the Treasury £130m for around ten years of underpaid taxes in the United Kingdom, in a deal announced by the then-Chancellor George Osborne which was widely criticised as being too lenient.

Google said €303 million was attributed to Google Italy and the remainder to Google Ireland.

Italy's tax office said the additional money Google will pay covers both its Italian and Irish units.

The biggest outstanding dispute in Europe concerns a record breaking €13 billion ($14.2 billion) tax bill that Ireland has been ordered to serve Apple.

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

The US-based company has previously said it complied with tax rules in all the countries it operates in.

Apple paid 318 million euros at the end of 2015 to settle a dispute over Italian earnings dating back to 2008.

'This latter point applies the Italian tax code in a way in which the UK's diverted profits tax (unfortunately named the Google Tax) doesn't'.

Apple is also facing a tax probe in France, While Italy has reportedly started looking into Amazon's tax contributions.