Google has reached an agreement with Italian authorities to pay €326 million (about $340 million) to settle a tax evasion investigation. This investigation, started by prosecutors in Milan, looked into Google’s failure to pay taxes on advertising income earned in Italy from 2015 to 2019. It focused on the company’s use of servers and other resources in Italy.
Google confirmed the settlement and noted that it resolved the tax audit without going to court. This came after a similar large settlement with France.
In another case, Google paid more than $1 billion to French authorities to settle a long-running tax dispute. This settlement included a €500 million penalty for tax evasion and an extra €465 million in back taxes. French authorities began investigating Google’s tax practices in 2015, focusing on the company’s practice of reporting its profits in a low-tax country like Ireland. This is a common strategy used by many multinational companies.
This is a lot of money to pay on tax evasion, even with the extra amount. It is not uncommon for a company pay less than it owes. This is due to how much money it costs to investigate and persecute, and so governments are usually okay with taking less to avoid spending more. So, the real amount may be more than we see.
The French government also introduced a 3% tax on big tech companies, which faced criticism from the U.S. and led to threats of American tariffs on French goods. France said it would only repeal this tax if a global agreement on taxing digital businesses is reached.
International talks are happening to create such an agreement, with G7 finance ministers hoping to finalize something by January and set up a way to resolve disputes. Time will tell how these investigations actually effect Google.
Source: ABC News
Published: Feb 19, 2025 10:20 am