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Google Belgian unit in tax probe: report

Google’s Belgian unit faces a tax probe, a report said Wednesday, after the US internet giant had to cough up hundreds of millions of euros in back taxes in Britain and Italy.

Many US and other multinational companies channel their European profits through low-tax jurisdictions such as Ireland to avoid massive bills running potentially into the billions.

Le Soir daily said that in its latest annual report, Google Belgium had informed shareholders that the authorities began an investigation last year into the company’s 2014 and 2015 accounts.

“Google Belgium is negotiating with the Belgian tax authorities so as to reach an accord,” the annual report reads.

The Belgian finance ministry said it could not comment on the matter as all tax matters were private, and gave no indication if the probe was routine or more serious.

For its part, Google Belgium said: “We pay all of the taxes due and comply with the tax laws in every country we operate in around the world.”

“We remain committed to Belgium and helping grow the online ecosystem.”

A source close to the matter said the two sides were talking about a regular audit but nothing more.

Google Belgium said in its annual report it had sales of 32 million euros ($38 million) last year, making a profit of 1.92 million euros and paying tax of 740,000 euros.

Alphabet, Google’s parent company, reported 2016 sales of nearly $90 billion.

In May, Google agreed to pay 306 million euros to the Italian authorities to settle a probe into how it booked profits generated in Italy through Ireland, its European headquarters.

In contrast however, a French court ruled in July that Google did not have to pay 1.12 billion euros in back taxes because its Irish subsidiary was not tax liable in France.

Google, along with peers Apple, Facebook and Amazon have all come under pressure in Europe Union over their business and tax practices.

The European Union hit Google with a record 2.4 billion euro fine in June for abusing its dominant position in the search engine business while Apple was ordered last year to repay 13 billion euros in back taxes in Ireland.