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Facebook surrenders to France

by on25 August 2020

Zuckerberg agrees to actually pay back taxes

Facebook's French subsidiary has agreed to pay more than $118 million in back taxes, including a penalty, after a ten year audit of its accounts by French tax authorities.

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.

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

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 euro, a copy of Facebook France's 2019 annual accounts, filed with France's companies registry showed.

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 euro. This includes a penalty of about 22 million, the annual accounts showed.

Last modified on 25 August 2020
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