MILAN, June 28 (Reuters) - Italy is asking Google to pay

1 billion euros ($1.07 billion) in unpaid taxes and penalties,

three sources with direct knowledge of the matter said on

Friday, seven years after the U.S. company settled a landmark

tax dispute with Rome authorities.

"We comply with tax regulations in all countries where we

operate, including Italy," a Google spokesperson said in a

statement, in response to a Reuters query about the claim. "We

cooperate with the authorities."

The sources said Italy's Revenue Agency has started an

adversarial process with Google which may end either with a

settlement or with the opening of a judicial litigation.

The investigation was launched in December 2022, and the

claims cover the years 2018 to 2022, one of the sources said.

Just as in the previous investigation, the probe led by

Milan prosecutors alleges that Google did not file and pay taxes

on revenues generated in Italy, but this time the basis for the

accusation is different, the sources said.

In 2017, Google paid 306 million euros because it

was deemed to have a permanent establishment in Italy on the

basis of its personnel operating in the country.

Now the challenge has been mounted on the basis of the

digital infrastructure it has in the country which allows it to

operate and generate revenue. This is the same approach that was

used in a recent Italian tax settlement with Netflix ( NFLX ).

Two of the sources said that if a settlement is reached, the

line of investigation will then be applied to all the

multinational web companies that are been under the scrutiny of

Milan prosecutors.

($1 = 0.9342 euros)