Google Denies Reports It Resolved Tax Dispute With Italy

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By Eric Lyman

A Google spokesman said Italian media reports that the Internet giant is on the brink of settling a high-profile tax dispute with Italy for nearly $300 million is inaccurate, but a former tax agency official told Bloomberg BNA it could mean a deal is near.

The Milan bureau for Rome daily La Repubblica reported Jan. 10 that the two sides were hammering out the final details of a deal in the case, in which Italy alleges Google illegally declared as much as 800 million euros ($848 million) in Italian income between 2009 and 2013, dramatically reducing its bill for the IRES corporate income tax for that period. The report said Google was willing to settle the case for between 270 million euros and 280 million euros and that only a few small details remain to be negotiated.

Those amounts are more than the 227 million euros Italy originally sought when it opened the case 11 months ago.

A Google spokesperson declined to discuss specifics of the case, saying only that the company “is continuing to work with the relevant authorities.”

Deal ‘Probably Close': Former Tax Official

But Francesco Brandi, a professor at Rome’s La Sapienza University who has worked as a ranking official within Italy’s tax collection agency, said a deal is probably close.

“I think someone involved in the negotiations leaked something to La Repubblica and they probably just published the story earlier than they should have,” Brandi said in an interview. “A deal is probably close.”

The probe into Google’s tax bill in Italy is among the most high-profile battlefronts for European countries looking to combat multinational Internet companies that declare income in low-tax jurisdictions in order to lower their tax bills. It was opened in February 2016, just two months after Apple Inc. settled a similar tax dispute by agreeing to pay 318 million euros for the period between 2008 and 2013.

To contact the reporter on this story: Eric J. Lyman in Rome at correspondents@bna.com

To contact the editor responsible for this story: Molly Moses at mmoses@bna.com

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