A report released by Italian finance police on Jan. 28 accused Google of evading $247.5 million in taxes between 2009 and 2013.
The company underreported its earnings to Italian authorities during that time period, the report claims, leading to increased profits for Google and less tax revenue for the country, Reuters reports.
A pending investigation will consider the accusations made by the report, and may result in hefty punitive fines for the company if the claims are found to be true.
Google, however, denies any wrongdoing.
"Google complies with the tax laws in every country where we operate," a Google spokesperson told Reuters. "We are continuing to work with the relevant authorities."
According to Google’s financial figures, the company paid about $2.5 million in taxes for its earnings of about $60 million in Italy in 2014; however, Italy’s Communications Authority calculated the company’s actual revenue to be about 10 times that amount.
The Internet giant is headquartered in Mountain View, California, but maintains numerous offices overseas; its European branch is centered in Dublin, Ireland, which has significantly lower corporate tax rates than Italy.
Google has claimed that its offices in Italy provide only consulting and marketing services for Google Ireland, the Middle East and Africa, and thus don’t fall into the same tax category as a “permanent establishment.”
Italy is not the first region to claim that Google has been dodging tax payments; on Jan. 24, the company agreed to pay $185 million in back taxes to the U.K., which also accused the company of underreporting its earnings, The Verge reported.
The Italian report sparked discussion within the European Commission, which considered a proposal that would allow European Union countries to tax corporations for all profits made within those countries, even if the money is sent abroad.