Facebook has agreed to pay 106 million euros ($125 million) to the French government in back taxes and penalties through its French subsidiary. This is being seen as a result of the persistent efforts of the French government to force the largest of the online companies such as Facebook and Google to pay more taxes in the country where such companies actually generate their revenues from.
According to a company spokesperson on Monday, the agreement between the largest social media company and the French authorities was arrived at following an extensive audit of a decade of Facebook’s operations in the country by French tax authorities. The government audited the operations and the revenues generated by the company from France between 2009 and 2018.
The company “takes its tax obligations seriously” wherever it operates, said the spokesperson of Facebook who was named in the media reports because he was not authorized to be publicly named according to Facebook policy.
No comments on the issue were also made by the French tax department which cited the right to tax secrecy for not providing any comment.
Following the decision of the company to include advertising income from French companies in its local accounting declarations in place of the usual custom of the company to declare them in Ireland which has very low corporate tax regimen, there was a huge surge in the revenues of the company from France. The international headquarters of Facebook are based in Ireland.
The result of the new auditing and accounting method adopted by the social media company, 8.4 million euros in profit taxes in France this year will be paid by Facebook is about 50 per cent more than what it had paid last year, said the company’s spokesperson.
This change in accounting format of Facebook is a result of the attempts of the French President Emmanuel Macron and his government to push largest of the online companies including Facebook, Google and Amazon, to more taxes to the local governments.
But the French efforts have not been taken well by the United States government as it stated that this was equal to targeting US companies. It had also started a tit-for-tat tax battle with the United States.
Global technology giants were imposed with a 3 per cent digital services tax by the French government. In response the Trump administration announced last month its plans to impose taxes on $1.3 billion worth of French imports into the country which includes handbags and makeup products.
(Adapted from France24.com)