Facebook to pay France €106m in back taxes

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 By Isaac Newton Tetteh – GITFIConline.com

World’s social media giant Facebook, has agreed to pay the French government some €106m (£95.7m) in back taxes to settle a dispute over revenues earned in the country.

The payment covers the last decade of its operations from France since 2009.

The social networking giant has also agreed to pay €8.46m in taxes on revenues in France for 2020 – 50% more than in 2019.

“We pay the taxes we owe in every market we operate,” said a Facebook spokeswoman

“We take our tax obligations seriously and work closely with tax authorities around the world to ensure compliance with all applicable tax laws and to resolve any disputes, as we have done with the French tax authorities.”

The social networking giant did not share details of the tax dispute, but France has been pushing tech companies to pay more tax inside the country where it is generated.

Other tech giants like Google, Apple and Amazon have reached similar agreements with the French tax authorities.

Facebook said that, since 2018, it had changed its sales structure so that “income from advertisers supported by it teams in France is registered in the country”.

The BBC understands that Facebook paid a tax rate in France of 38% in 2019, which is above the statutory income tax rate of 33.3%.

In February this year, Facebook boss Mark Zuckerberg said he recognised the public’s frustration over the amount of tax paid by tech giants.

He added that Facebook accepted the fact that, it might have to pay more tax in Europe “in different places under a new framework” going forward, and backed plans by think tank the Organization for Economic Co-operation and Development (OECD) to find a global solution to how to tax tech companies

Last year, France announced a new digital services tax on multinational technology firms, but in January, the country said it would delay the tax until the end of 2020.

The new tax would have required global tech giants to make tax payments equivalent to 3% of their French revenues twice a year in April and in November.

In response to France delaying the new tax, the US said it would not impose retaliatory tariffs on $2.4bn (£1.8bn) of French goods, including champagne and cheese.

Sources: BBC.com