Italy’s efforts to crack down tax evasion purported by technology giant Google has finally paid off. The tech company will pay €306m or £259m to settle a tax dispute and other disputes that prompted a criminal probe.
Apparently, Google has been avoiding paying the full amount on its revenues in Italy for more than a decade. According to the police, between 2009 and 2013, the company booked around €1bn of its revenues in Ireland, one of the two countries where companies book their income to evade paying taxes. The other one is Luxembourg.
The Italian police’s accusation prompted a criminal investigation that will end when Google settles its tax bill.
Google said the agreed amount is on top of taxes already paid in Italy over the period.
Italy got more than what the UK did when the tech giant agreed to pay the Treasury the amount of £130m for a decade of underpaying taxes.
To ensure that Google will not pull the same trick in the future, Italy’s tax agency has prepared an agreement that leaves little room for tax evasion. They drew up an “agreement that will ensure Google pays the correct taxes in Italy in the future”.
While the search giant has agreed to settle tax disputes in Italy, it has yet to do the same with France. Authorities believe that Google owes the country €1.6bn in unpaid taxes, which they’re likely to have to pay in full since the French Finance Minister, Michael Sapin, will not negotiate a deal but pursue legal action against the technology giant instead.
Have you received a huge tax bill? Find out if you’re owed some tax back here