Italy looking at Google proposal to settle tax dispute: source

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[January 10, 2017]  MILAN (Reuters) - Italy's tax authorities are looking at a proposal from Alphabet Inc's Google to pay between 270 million and 280 million euros ($286-296 million) to settle a tax dispute, a source close to the matter said on Tuesday.

A man holds his smartphone which displays the Google home page, in this picture illustration taken in Bordeaux, Southwestern France, August 22, 2016. REUTERS/Regis Duvignau

A year ago Italian tax police alleged that Google had evaded paying taxes worth 227 million euros between 2009 and 2013 in a move which was said could result in heavy punitive fines.

Governments across Europe are looking for ways to change tax rules which allow multinationals to park profits in other tax jurisdictions.

Some countries, including Italy, are also trying to use existing tax rules to force companies to pay more tax on the profits generated by sales in their countries.

At the end of 2015 Apple Inc agreed to pay Italy's tax office 318 million euros to settle a dispute over allegations it failed to pay taxes for six years.

"There was a meeting with Google's lawyers just before Christmas when the proposal was presented", the source said.

But sticking points to a final settlement include working out final details on how revenues are booked for tax purposes and securing a commitment from the U.S. giant to pay taxes in Italy in the future, the source added.

"Google is continuing to work with the competent authorities," a company spokeswoman said.

In January last year Google agreed to pay the British government 130 million pounds ($158 million) in back taxes in a deal which opposition parties in the country criticized as too little in view of the size of Google's UK revenues.

(Reporting by Emilio Parodi; Writing by Stephen Jewkes; Editing by Greg Mahlich)

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