Google to Pay $340 Million to Italy to Settle Case Over Unpaid Taxes

The logo of Google LLC on a building in San Diego, Calif., on Oct. 9, 2024. Reuters/Mike Blake

Milan prosecutors have announced plans to drop a tax case against Google’s European division after the tech giant agreed to pay 326 million euros ($340 million) to settle allegations of unpaid taxes in Italy.

The agreement covers Google’s tax obligations from 2015 to 2019, including penalties, sanctions, and interest.

The case centered on claims that Google failed to properly declare and pay taxes on revenue generated in Italy despite its digital infrastructure in the country.

The settlement follows a broader effort by Italian authorities to crack down on multinational corporations that route revenue through lower-tax jurisdictions.

In June 2024, Italy sought up to 1 billion euros from Google in unpaid taxes and penalties.

Google’s settlement is the latest in a series of tax disputes between Italy and major international companies.

In 2017, the company reached a similar deal with Italian authorities, agreeing to pay 306 million euros ($319 million) after a probe concluded it had a permanent presence in Italy but had not fully met its tax obligations.

Other tech giants have also faced scrutiny over their business practices in Italy. In 2021, the Italian antitrust regulator fined Amazon a record 1.13 billion euros ($1.18 billion) for allegedly abusing its market dominance by favoring its own logistics service, Fulfillment by Amazon.

In 2024, TikTok was fined 10.94 million euros ($11.4 million) for failing to protect minors from harmful content on its platform, following an investigation by Italy’s Competition Authority.

Italy is one of several European countries that have challenged the tax and business practices of major technology companies.

These disputes often involve claims that companies channel profits through countries with lower corporate tax rates, such as Ireland or the Netherlands, rather than paying higher taxes in nations where they generate substantial revenue.

While Google did not respond to a request for comment from The Epoch Times on the settlement, the company has previously stated that it complies with tax laws in all jurisdictions where it operates.

The case also highlights the broader push in Europe to tighten tax regulations on multinational companies.

The European Commission has advocated for reforms to ensure large corporations pay taxes in countries where they conduct significant business.

In 2021, the Organization for Economic Cooperation and Development (OECD) brokered a landmark global tax deal supported by more than 130 countries, including Italy, aimed at curbing profit shifting and introducing a minimum corporate tax rate of 15 percent, according to the OECD’s website.

Italy has been a key player in these efforts, supporting the European Union’s proposed digital tax, which aims to impose levies on tech firms’ revenues in member states where they operate rather than allowing profits to be taxed primarily in low-tax jurisdictions.

The Milan prosecutor’s office did not respond to a request for more information on the settlement by publication time.

Dorothy Li and Reuters contributed to this report.