The agreement resolves a series of disputes including a criminal probe that saw police accuse Google of booking around €1bn of revenues from Italy in Ireland between 2009 and 2013, the Telegraph reports.
The sum, announced on Thursday, also closes other disputes dating between 2002 and 2015. The company said the agreement is in addition to taxes already paid in Italy over the period.
The payment that Italy has secured is significantly higher than the £130m that Google agreed to pay the Treasury last year for a decade of underpaid taxes, and is the latest crackdown from Europe. George Osborne, the chancellor at the time, was criticised for letting Google off easy.
Italy’s tax agency said: “We have also begun the process of drawing up an agreement that will ensure Google pays the correct taxes in Italy in the future.”
The tax authority, which agreed a similar deal with Apple in 2015, added that it is committed to cracking down on the fiscal behaviour of technology giants in Italy. Apple paid €318m for taxes due between 2008 and 2013.
Individual countries and the European Commission have heaped pressure on technology giants to back-pay taxes avoided by booking income in countries such as Ireland and Luxembourg.
The Commission last year accused Ireland of helping Apple to artificially lower its tax bill for two decades and ordered the government to claw back a record-breaking €13bn.
The search giant is facing another case in France where the authorities believe it owes €1.6bn in unpaid taxes. Michel Sapin, the French finance minister, has said he won’t negotiate a deal with Google, but will instead pursue legal action.
The Italian authority reportedly started proceedings against Amazon last week, which it estimates could owe €130m for passing its earnings through Luxembourg.