Facebook to pay $118 million in French back taxes

Platform Economy: The technology sector in Paris, France

Facebook’s French subsidiary has agreed to pay more than 100 million euros (approximately $118 million) in back taxes, including a penalty, after a ten-year audit of its accounts by French tax authorities, the company has said.

France, which is pushing hard to overhaul international tax rules on electronic companies such as Facebook, Google, Apple and Amazon, has said the big technology groups pay too little tax in the country where they have considerable sales.

Current global tax rules legally allow organisations to funnel sales generated in local markets in Europe for their regional headquarters. Some of the technology companies, including Facebook, have European or global headquarters based in nations with relatively low corporate tax rates, such as the Republic of Ireland.

A Facebook spokesman said French tax authorities carried out an audit on Facebook’s accounts over 2009-2018 period, which resulted in an arrangement by the subsidiary to pay a total 106 million euros.

The Facebook spokesman did not elaborate further on the details of the agreement. France’s tax authority did not give more details.

Facebook’s spokesman also said that since 2018 the firm had decided to add its advertising sales in France in its annual accounts covering France.

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As a result, Facebook’s total net revenue almost doubled in 2019 from a year before to 747 million euros, a copy of Facebook France’s 2019 annual accounts, registered with France’s businesses registry and seen by journalists, showed.

Facebook France, which employs some 208 individuals, describes the French tax audit report in its 2019 yearly 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.

French magazine Capital was first to report the payment of back taxes.

Facebook’s spokesman stated that the company paid 8.5 million euros of income taxes in 2019 in France, an increase of almost 50 percent from a year earlier.

“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,” he said.

The team at Platform Executive hope you have enjoyed the ‘Facebook to pay $118 million in French back taxes‘ article. Initial reporting via our content partners at Thomson Reuters. Reporting by Mathieu Rosemain. Additional reporting by Leigh Thomas. Writing by Geert De Clercq. Editing by Alison Williams and Jane Merriman.

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