Google Agrees to Pay Italy $334 Million in Back Taxes

Google Agrees to Pay Italy $334 Million in Back Taxes

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Google headquarters in Mountain View, Calif. As European lawmakers grapple with how much tax technology companies should pay on their overseas operations, industry executives are considering repatriating some profit to the United States.

Credit
Jeff Chiu/Associated Press

When it comes to the huge profits of American technology giants, Europe wants a slice of the cake.

Google on Thursday became the latest company to agree to pay back taxes, in this case 306 million euros, or $334 million, to the Italian authorities for its operations in the country from 2002 to 2015.

Under a similar agreement in late 2015, Apple agreed to pay Italy €314 million in back taxes.

But Apple and the Irish government are appealing a separate €13 billion tax charge levied by the European Commission, the executive arm of the European Union, which said the company owed more tax on its businesses in Ireland.

As European lawmakers grapple with how much tax technology companies should pay on their overseas operations, industry executives are considering repatriating hundreds of billions of dollars under the Trump administration’s proposed “tax holiday,” which would shrink the current levy of 35 percent, before deductions, on such income.

American multinationals now hold an estimated $2.6 trillion overseas, most of it from tech companies’ global operations, and a reduction in the tax rate could inspire them to return a sizable amount of cash to the United States.

How Europe Is Going After Apple, Google and Other U.S. Tech Giants

The biggest American tech companies face intensifying scrutiny by European regulators, with — pressure that could potentially curb their sizable profits in the region and affect how they operate around the world.


While changes to the tax system are at an early stage in Washington, some European policy makers worry that funds returned to the United States would allow American companies to avoid paying their fair share of tax in Europe, an accusation that tech industry officials reject.

Despite this potential sour point between the United States and Europe, politicians worldwide have joined forces to revamp the global tax system as a way to make multinational companies pay more tax on their foreign operations and restrict the transfer of profit to low-tax havens like Ireland and Bermuda.

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