Prosecutors in Milan issued a statement saying they had reached a settlement with a multinational video-on-demand streaming company for the period from October 2015 to 2019 and demanded 55.8 million euros ($59.1 million).
They gave the settlement figures without specifying the companies involved, but three people familiar with the matter confirmed it was Netflix.
A Netflix spokesman said the company was pleased to have finalized the matter.
“We have been in dialogue and cooperation with the Italian authorities and continue to believe that our actions are in full compliance with Italian and international rules,” the spokesman said.
Prosecutors opened an investigation into potential tax evasion three years ago.
They claim Netflix should pay taxes in Italy because it relies on digital infrastructure to stream content to the country’s 2 million subscribers.
As a backdrop to the payment agreement, Netflix has now opened an office in Italy, a base in Rome, and employs more than 40 people.
The investigation by Milan prosecutors found that the cables and computer servers used by Netflix amounted to a physical presence in Italy, sparked by checks carried out by the Italian tax police.
Prosecutors in Milan have in the past investigated tax evasion by other U.S. tech giants such as Apple, Amazon and Facebook, which has netted Italy billions of euros in fines and taxes.