Last year Italian tax police alleged that Google had not paid tax on about 1 billion euros of Italian revenue between 2009 and 2013. Tax officials said the settlement announced Thursday also launches a process to determine the tech company's proper taxation level in Italy going forward.
The amount covers the period between 2002 and 2015 and refers to Google Italy and Google Ireland, Google and Italy's tax agency said. The spokesman said Google "confirms its commitment towards Italy and will continue to help the country's online ecosystem grow".
The company worked out a similar deal with the United Kingdom a year ago, handing over $185 million to British tax authorities.
Google agrees to pay US$335 million (AU$453 million) back taxes in Europe.
The US-based company has previously said it complied with tax rules in all the countries it operates in.
The Italian settlement brings into sharp focus again, the amount of corporation tax paid by Google in Ireland where its Europe, Middle East and Africa HQ is registered and based. In September, the European Commission ordered Apple to pay record $14.5 billion in tax arrears to Ireland, but Dublin, which benefits from hosting a number of multinationals due to it lax tax regime, has appealed the ruling.
Finance minister Michel Sapin said a year ago that France wouldn't negotiate with Google, but would instead pursue the company through the courts.
The French tax authorities have an investigation underway and reportedly will be looking for around one billion euros.