Key Points
- Google agreed to pay €326 million to settle a tax case with Italian prosecutors. The payment covers tax liabilities from 2015 to 2019, including penalties and interest.
- Italy had initially demanded €1 billion in unpaid taxes and fines. In 2017, Google paid €306 million to settle a similar case regarding its presence in Italy.
- European regulators continue to crack down on tax avoidance by multinational tech firms.
- The settlement reinforces Italy’s commitment to ensuring big tech firms pay local taxes.
Milan prosecutors have announced plans to drop a tax case against Google’s European division after the tech giant agreed to pay €326 million ($340 million) to settle claims of unpaid taxes. According to an official statement released on Wednesday, the agreement covers the period between 2015 and 2019, including penalties, interest, and sanctions.
The case stemmed from allegations that Google failed to declare and pay taxes on revenue generated in Italy despite having digital infrastructure there. Italian authorities initially sought €1 billion in unpaid taxes and penalties.
This is not the first time Google has been scrutinized for its tax practices in Italy. In 2017, the company paid €306 million to settle a similar dispute, with authorities ruling that Google had a permanent business presence in Italy and was liable for local taxation.
The latest settlement is part of a broader trend of European regulators cracking down on multinational corporations accused of tax avoidance. Countries like Italy, France, and the UK have been increasingly pursuing aggressively big tech firms that route profits through lower-tax jurisdictions while generating significant revenue within their borders.
By reaching this agreement, Google avoids prolonged litigation and potential reputational damage. However, it highlights the ongoing efforts by European governments to ensure that digital giants pay their fair share of taxes in the regions where they operate.
The case also underscores Italy’s determination to enforce stricter tax compliance for tech firms, especially those with digital infrastructure in the country. Google’s latest settlement may set a precedent for future tax negotiations between European authorities and multinational corporations.
