Facebook to pay $125 million in back taxes to France

Reuters
Paris, France Published: Aug 25, 2020, 09:22 AM(IST)

A 3D-printed Facebook logo is seen placed on a keyboard in this illustration Photograph:( Reuters )

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France, which is pushing hard to overhaul international tax rules on digital companies such as Facebook, Alphabet's Google, Apple and Amazon, has said the big tech groups pay too little tax in the country where they have significant sales.

Facebook's French subsidiary has agreed to pay $125 million (106 million euros) in back taxes and penalties following persistent government efforts to get online giants to pay more taxes where they make their money.

The agreement came after French tax authorities carried out an extensive audit of a decade of Facebook's operations in the country, from 2009-2018, a company spokesperson said Monday.

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The Facebook spokesman did not elaborate further on the details of the agreement. France's tax administration also did not give more details.

Facebook's spokesman also said that since 2018 the company had decided to include its advertising sales in France in its annual accounts covering France.

As a result, Facebook's total net revenue almost doubled in 2019 from a year earlier to 747 million euros, according to a copy of the company's 2019 annual accounts, filed with France's companies registry.

Facebook France, which employs 208 people, refers to the French tax audit report in its 2019 annual accounts, saying it amounted to a tax adjustment of about 105 million euros. This includes a penalty of about 22 million, the annual accounts showed.

France, which is pushing hard to overhaul international tax rules on digital companies such as Facebook, Alphabet's Google, Apple and Amazon, has said the big tech groups pay too little tax in the country where they have significant sales.

Current international tax rules legally allow companies to funnel sales generated in local markets in Europe to their regional headquarters. Some of the tech companies, including Facebook, have European or international headquarters based in countries with comparatively low corporate tax rates, such as Ireland.

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