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Thursday, October 29, 2020

Facebook Agrees to Pay $110 Million in Back Taxes in France

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Facebook has agreed to pay over 100 million euros ($118 million) as back taxes to the French government. The amount includes a penalty and comes after French tax authorities conducted a ten-year audit of Facebook’s accounts.

To be specific, French tax authorities audited Facebook’s accounts over the 2009 – 2018 period. The total amount as part of the agreement is 106 million euros, of which about 22 million is because of the penalty. The exact terms of the agreement remain unknown.

As reported by Reuters, the French government says big tech companies are paying too little tax despite having significant sales in certain countries. Right now, international tax rules permit tech giants to pay taxes for sales generated in local markets in Europe to their regional headquarters. In other words, brands can simply set up headquarters in countries with low tax rates to evade higher taxes.

“We take our tax obligations seriously, pay the taxes we owe in all markets where we operate and work closely with tax authorities around the world to make sure we abide by all applicable tax laws and resolve any litigation,” a Facebook spokesperson told Reuters.

Until 2018, Facebook did not include revenue generated through advertising sales in its annual accounts in the country. Hence, the company’s accounted revenue almost doubled to 747 million euros in 2019. Facebook’s increased revenue records have also reflected in its income taxes in France. The company’s French subsidiary is said to have paid 8.5 million euros as income taxes in the year. According to Reuters, this is almost a 50 percent increase from 2018.

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