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Google agrees to pay Italy €306 million in taxes

Internet giant Google has agreed to pay Italy €306 million in taxes, ending a dispute that has dragged on for over a year, according to reports on Thursday.

Published: 4 May 2017 14:23 CEST

Google agrees to pay Italy €306 million in taxes

File photo: Giuseppe Cacace/AFP

Last year, Italy's tax police said Google had failed to declare €100 million in income and pay €200 million in royalty taxes between 2009 and 2013.

“In addition to the taxes already paid in Italy during those years, Google will pay a further 306 million euros,” a spokeswoman for the American company said in an email cited by financial daily Il Sole 24 Ore. “Google confirms its commitment to Italy and will continue to work to help grow the online ecosystem of the country.”

Italy's tax agency said that talks would begin on signing “preventive agreements” to ensure the company pays the correct tax in the future.

The initial allegations followed a lengthy investigation into Google's tax arrangements, which saw five Google executives probed, including two former presidents of Google Italia.

Google Italia is part of the company's European operation which is headquartered in Ireland, a country with one of the lowest levels of corporation tax in the European Union.

READ ALSO: Italians are Europe's worst tax cheats (again…)
Photo: FuFuWolf/Flickr

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Beskæftigelsesfradraget: What is Denmark's employment allowance?

What is the employment allowance?

The Beskæftigelsesfradraget (from beskæftigelse, meaning employment, and fradrag, meaning rebate) was brought in by the centre-right Liberal Party back in 2004, the idea being that it would incentivise people to get off welfare and into a job.

Everyone whose employer pays Denmark’s 8 percent AM-bidrag, or arbejdsmarkedsbidrag, automatically receives beskæftigelsesfradraget. Unlike with some of Denmark’s tax rebates, there is no need to apply. The Danish Tax Agency simply exempts the first portion of your earnings from income taxes.

In 2022, beskæftigelsesfradraget was set at 10.65 percent of income with a maximum rebate of 44,800 kroner.

How did the government agree to change the employment allowance in its coalition deal?

In Responsibility for Denmark, the coalition agreement between the Social Democrats, the Liberals and the Moderate Party, the new government said it would set aside 5 billion kroner for tax reforms.

Of this, 4 billion kroner was earmarked for increasing the employment allowance, with a further 0.3 billion going towards increasing an additional employment allowance for single parents.

According to the public broadcaster DR, the expectation was that this would increase the standard employment allowance to 12.75 percent up to a maximum rebate of 53,600 kroner.

How might this be further increased, according to Børsen?

According to a report in the Børsen newspaper, the government now plans to set aside a further 1.75 billion kroner for tax reforms, of which nearly half — about 800 million kroner — will go towards a further increase to the employment allowance.

The Danish Chamber of Commerce earlier this month released an analysis in which it argued that by raising removing all limits on the rebate for single parents and raising the maximum rebate for everone else by 20,300 kroner, the government could increase the labour supply by 4,850 people, more than double the 1,500 envisaged in the government agreement.

According to the Børsen, the government estimates that its new extended allowance will increase the labour supply by 5,150 people.

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