Officials had started discussions with Google representatives relating to its earnings in Italy in the years from 2008 to 2013, Milan prosecutor Edmondo Bruti Liberati said in a statement. No accord had been finalised yet.
Checks on tax payments had been made as part of the investigation, the statement said.
Google was considering whether to provide information over revenues it generates in Italy, it added. It did not say when the investigation or the discussion with Google would conclude.
Authorities in countries across Europe have been investigating whether big companies like Google are using complex accounting schemes to cut their tax bills.
Italian newspaper Corriere della Sera said on Wednesday that Google had reached a settlement with Italian authorities that envisages the payment of EUR 320 million ($363 million, roughly Rs. 22,484 crores). That amount was calculated on a taxable income in Italy of EUR 800 million over five years, the paper said.
A Google spokeswoman in Italy said in an email there had been no settlement. She said the group continued to work with the Italian tax authorities.
This is not the first time Italy has investigated Google over tax-related issues.
In November 2012 an economy ministry document said Google had developed a system to transfer profits from its Italian operations to Ireland so it could benefit from a more favourable tax regime.
The document said earlier investigations had found the group failed to declare at least EUR 240 million of income to authorities and owed more than EUR 96 million in sales tax.
Google has always denied any allegations of wrongdoing.
© Thomson Reuters 2015
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