Italy demands repayment after Google tax probe
ROME -- The Italian treasury is demanding a 227 million euro back-payment from Google after it was discovered that the corporate giant had evaded this sum in tax between 2009 and 2013, a Reuters report said.
Italian authorities claim that the company had evaded paying taxes in Italy by routing its revenue to Ireland. In 2014 they paid 2.2m euros of tax on revenues of 54.4m euros of income, said Reuters, but investigations by Italy's Communications Authority have suggested that Google actually earned around ten times this.
“Google complies with the tax laws in every country where we operate. We continue to work with the relevant authorities,” a company spokesman said in an emailed statement.
A deal is hoped to be struck between Italy's treasury and Google for a payback of 15 percent of Google's income in Italy, which amounts to a hefty one billion euros, which stands in contrast to the three percent demanded recently by the UK government. UK Prime Minister David Cameron has come under criticism for not demanding more from the Internet firm, calling into question whether Google and other multinational companies will be able to use the UK deal as a template for future deals to settle tax back-payments in other countries.
The European Union on Thursday proposed a new set of rules to combat tax avoidance schemes by multinationals across the Union’s 28 countries. The European Parliamentary Research Service estimates that corporate tax avoidance results in a loss of tax revenue to the EU of about €50 billion to €70 billion each year. ft