Google agrees to pay $334M in back taxes in Italy

Google office building entrance sign in Hamburg, Germany. The U.S. tech giant agreed to pay $334 million in back taxes to the Italian government the latest settlement for a tech company in the Eurozone. File photo by lightpoet/Shutterstock

May 5 (UPI) — Tech giant Google agreed to pay $334 million to the Italian government to cover a back tax bill, the latest settlement by a U.S. tech company for business in Europe.

The settlement covers taxes on profits from 2002-15, which the Italian government said Google made in the country but transferred to other European countries where corporate taxes are much lower.

Google worked out a similar deal with Britain last year, agreeing to pay $185 million in back taxes. The French government is pursuing its own tax case in its courts.

Apple has faced similar investigations by Eurozone countries, which can set their own tax rates. Some countries like Ireland and Luxembourg charge little or no corporate taxes in a bid to lure foreign investment, while others charge 30 percent or higher. Some U.S.-based companies like Google and Apple that make billions in profits across Europe have used those low-tax countries as a base for European operations.

Regulators both for the European Union and individual countries allege the companies then transfer profits back to their outposts in the low-tax countries to avoid paying higher rates elsewhere.

In Apple’s case, the European Authority, which administers EU law, ordered the Irish government to levy Apple a whopping $14 billion tax bill after regulators said the Irish government helped Apple avoid paying other Eurozone taxes for 20 years.

Both Apple and the Irish government have appealed the decision.

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