Paris: Google agreed to pay close to €1 billion ($1.6 billion) to French authorities to settle a fiscal fraud probe that began four years ago in a deal that may create a legal precedent for other large tech companies present in the country.

French investigators have been seeking to establish whether Google, whose European headquarters are based in Dublin, failed to pay its dues to the state by avoiding to declare parts of its activities in the country.

Google, part of Alphabet Inc, pays little tax in most European countries. Credit:Bloomberg

The settlement comprises a fine of €500 million and additional taxes of €465 million, Google said in a statement.

Google, part of Alphabet Inc, pays little tax in most European countries because it reports almost all sales in Ireland. This is possible thanks to a loophole in international tax law but it hinges on staff in Dublin concluding all sales contracts.