Italy has claimed €227 million in unpaid tax from Google from between 2009 and 2013.
Google paid €2.2 million of tax in Italy in 2014 on revenues of €54.4 million generated in the country, Reuters reported.
The Italian Communications Authority estimates that Google's Italian revenues are 10 times that.
Google is paying back 3 per cent in tax, or £130 million, to the UK tax authority in a deal slammed by MEPs as "not fair competition".
Commenters have rubbished Osborne's initial claims that the UK tax deal was a "major success".
"It looks like Osborne's 'major success' over Google has made the UK the laughing stock of Europe," said Wes Streeting, Labour MP for Ilford North.
Jeremy Corbyn, leader of the opposition, fired four questions about the Google deal at David Cameron during Prime Minister's Questions on Wednesday, including one from a working man in his thirties called Geoff.
“Geoff speaks for millions of people when he says to me, 'Is there a scheme that I can join that has the same rate of tax as Google?'” Corbyn said.
Cameron deflected the question, choosing to blame Tony Blair, Gordon Brown and Alistair Darling for Google's low rate of tax. Corbyn reminded Cameron that he is the Prime Minister currently responsible for addressing taxes.
Eva Joly, vice chair of the Special European Parliamentary Committee on Tax Rulings, said that the deal looked like the UK wanted to become a tax haven.
On Wednesday, Margrethe Vestager, the European Competition Commissioner, said she would investigate Google's tax arrangements if someone complained about them.
The SNP swiftly released a statement to say that a letter was on its way.
The European Commission is due to publish plans on Wednesday that may force Google and other multi-national companies to pay more in tax.
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