GOOGLE SETTLES ITALIAN TAX DISPUTE FOR €326 MILLION

Fri 21 February 2025:

Tech giant Google has paid 326 million euros (339.4 million U.S. dollars) to settle a dispute over unpaid taxes, Italian authorities confirmed on Wednesday.

Prosecutors in Milan launched an investigation into Google Ireland Limited after the Italian revenue agency determined that the company had failed to declare its income and pay related taxes for the period from 2015 to 2019.

Following an agreement, Google paid 326 million euros, covering taxes, fines, and interest, to resolve the dispute with Italian tax authorities, Milan Chief Prosecutor Marcello Viola said in a statement.

After the final protocol was signed on Jan. 28, a request had been submitted to the preliminary investigation judge to dismiss the pending case against Google, he said, adding that the investigation, conducted in cooperation with finance police and the revenue agency, focused on revenues generated through the sale of advertising space. (1 euro = 1.04 U.S. dollar)

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Google’s income comes from a variety of sources, but the vast majority is generated by advertising. Here’s a breakdown:

1. Advertising:

Google Search: This is the bread and butter. When you search on Google, you’ll see ads alongside the organic results. Advertisers pay to have their ads appear for specific keywords, and Google makes money when people click on those ads.
YouTube Ads: YouTube is the world’s largest video platform, and ads are a major source of revenue. These can be pre-roll ads, banner ads, or ads that appear alongside videos.
Google Network: This refers to a network of websites and apps that partner with Google to display ads. Website owners earn money when users interact with these ads, and Google takes a cut.

2. Other Revenue:

Google Cloud: This is a growing part of Google’s business. It provides cloud computing services to businesses, including data storage, computing power, and software tools.

Google Play: Google’s app store for Android devices generates revenue from app sales, in-app purchases, and subscriptions.
Hardware: Google also makes money from selling hardware products like Pixel phones, Nest smart home devices, and Chromecast streaming devices.
Subscriptions: Google offers various subscription services, such as YouTube Premium (ad-free viewing and music streaming) and Google One (cloud storage).

Key Points:

Advertising Dominance: Advertising remains the overwhelming source of Google’s income.
Diversification: While advertising is key, Google is actively diversifying its revenue streams with cloud computing, hardware, and subscriptions.
Massive Scale: Google’s income is enormous, thanks to the sheer scale of its reach and the popularity of its products and services.

Essentially, Google makes money by connecting advertisers with users, providing cloud services to businesses, and offering a range of products and services that people use every day.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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