25.08.2020 Europe

Facebook agrees to pay France €106 million in back taxes

By Agencies - RFI
© AFP/File
LISTEN AUG 25, 2020
© AFP/File

US social media giant Facebook has agreed to pay the French government 106 million euros in arrears for its French operations over a 10-year period from 2009. It also agreed to pay 50 percent more tax in the current year.

"We take our tax obligations seriously, pay the taxes we owe in all the markets in which we operate and work closely with tax administrations around the world to ensure compliance with all applicable tax laws and resolve any disputes," a Facebook France spokesperson said in a statement.

The statement said that since 2018, Facebook changed its sales structure so that "income from advertisers supported by our teams in France is registered in this country".

The payment by American digital giants of tax on revenues in the country in which they are accrued has been the subject of a longstanding conflict between France and the United States. Many have their EU headquarters in low-tax-regime countries.

"This year we are paying 8.46 million euros in income tax, an increase of almost 50 percent compared to last year," the spokesperson added.

"We have also entered into an agreement with the tax authorities covering the years 2009-2018, under which we will make a payment of 106 million euros."

The dispute between France and the United States on the digital giants' tax has escalated to the extent that the United States in July unveiled heavy import duties on France.

The office of US Trade Representative Robert Lighthizer found France's digital services tax was discriminatory and "unfairly targets US digital technology companies," and said it would impose punitive duties of 25 percent on $1.3 billion worth of French products.

But it will hold off on collecting the fees to allow time for the dispute to be resolved.

Big European Union countries say the GAFA -- Google, Apple, Facebook and Amazon -- are unfairly exploiting tax rules that let them declare profits in low-tax havens, depriving governments of a fair share of their fiscal payments.

In the meantime, France, Britain, Spain, Italy and others have imposed taxes on the largest digital companies.

US officials have slammed these moves as discriminating against American firms, and say any new levies should come only as part of a broader overhaul of international tax rules.

In January, 137 countries agreed to negotiate a deal on how to tax tech multinationals by the end of 2020, under the auspices of the Paris-based Organisation for Economic Co-operation and Development.

(with AFP)

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