Italy confirms Google will pay US$335 million to settle tax disputes

A logo is pictured at Google's European Engineering Center in Zurich April16, 2015. Reuters/Arnd Wiegmann

Google agrees to pay US$335 million (AU$453 million) back taxes in Europe. The company (GOOGL, Tech30) is required to pay the said amount under government pressure to settle taxes for the years 2009 to 2015, Italy's tax agency confirms.

Italian revenue agency spokesperson Sergio Mazzei said Google will start paying tax in Italy based on its earnings inside the country. The company, along with other global giants such as Apple and Starbucks, were accused of shifting their sales and profits across international borders so they won’t have to face high rates of corporate tax.

According to CNN, French tax officials have been chasing Google. Police has reportedly raided its offices in the country.

Google confirmed on Thursday that it would pay its back taxes in Italy, including what it paid during 13 years of operations through 2015, the New York Times reported. The agreement is expected to put an end to several disputes, which include a criminal probe that saw police accuse Google of booking around its revenues from Italy in Ireland between 2009 and 2013.

Meanwhile, Telegraph reports that Italy's tax agency declared it begins a process of drawing up an agreement that will guarantee Google pays the correct taxes in the country. The Italian authority is also dealing with proceedings against Amazon.

Last year, Finance minister Michel Sapin said France would not negotiate with Google. He said the country would rather pursue legal actions.

In Australia, reports lodged by the Australian arms of the company indicate surges in local income and tax paid as a result of obedience with former treasurer Joe Hockey’s Multinational Anti-Avoidance Law. The Australian notes that the remainder of Google’s local revenue is from R&D services for its United States parent.

Revenue Minister Kelly O’Dwyer told Adelaide radio last month that the Government had “the strongest tax laws in the world.” She said the Australian Taxation Office now has the authority to go after huge multinational companies and ensure they are paying the correct amount of tax that they owe to the Australian people.

“Because at the end of the day, this money that is owed to the Australian people pays for roads, it pays for hospitals, it pays for schools, and we would be derelict in our duty if we didn’t go after every cent of it,” O’Dwyer added. News.com.au reported that Treasurer Scott Morrison was looking to wring billions from Google and other big companies.