Facebook agrees with France to pay €106 million in back taxes

US social media giant Facebook on Monday said it had agreed with the French government to pay €106 million in back taxes for its French operations over a 10-year period from 2009, and to pay 50 percent more tax in the current year.

Facebook agrees with France to pay €106 million in back taxes
Many of the US digital giants have their EU headquarters in low-tax-regime countries. Photo: AFP

“We take our tax obligations seriously, pay the taxes we owe in all the markets in which we operate and work closely with tax administrations around the world to ensure compliance with all applicable tax laws and resolve any disputes,” a Facebook France spokesperson said in a statement.

The statement said that since 2018, Facebook changed its sales structure so that “income from advertisers supported by our teams in France is registered in this country”.

“This year we are paying €8.46 million in income tax, an increase of almost 50 percent compared to last year,” it said. 

“We have also entered into an agreement with the tax authorities covering the years 2009-2018, under which we will make a payment of €106 million.”

The payment by American digital giants of tax on revenues in the country in which they are accrued has been the subject of a longstanding conflict between France and the United States. 

Big EU countries say the so-called GAFA – Google, Apple, Facebook and Amazon – are unfairly exploiting tax rules that let them declare profits in low-tax havens, depriving governments of a fair share of their fiscal payments.

Many of the US digital giants have their EU headquarters in low-tax-regime countries. 

The dispute between France and the United States on the digital giants' tax has escalated to the extent that the United States in July unveiled heavy import duties on France.

The office of US Trade Representative Robert Lighthizer found France's digital services tax was discriminatory and “unfairly targets US digital technology companies,” and said it would impose punitive duties of 25 percent on $1.3 billion worth of French products.

But it will hold off on collecting the fees to allow time for the dispute to be resolved.

READ ALSO: Trump's US wine tariffs 'threaten 100,000 jobs in French countryside'


In the meantime, France, Britain, Spain, Italy and others have imposed taxes on the largest digital companies.

US officials have slammed these moves as discriminating against American firms, and say any new levies should come only as part of a broader overhaul of international tax rules.

In January, 137 countries agreed to negotiate a deal on how to tax tech multinationals by the end of 2020, under the auspices of the Paris-based Organisation for Economic Co-operation and Development.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


Facebook refuses to pay French media for links

Facebook said Friday that it will not pay French media groups to display photos or video and text excerpts alongside links to articles shared by its users, in defiance of new EU copyright rules.

Facebook refuses to pay French media for links
Photo: AFP

The social media giant joins Google in opposing a law that came into force in France on Thursday, and aims to ensure news publishers are compensated when internet firms display their content.

On Facebook, shared articles are routinely “enriched” to include photos, text, video excerpts or author names, making people more likely to click on the links.

Jesper Doub, Facebook's director for news partnerships in Europe, said in a blog post Thursday that French media groups would have to give consent for this to continue.

The company later confirmed that publishers would not be compensated for the use of enriched links, depriving them of the revenue stream the EU law is meant to provide.

If they do not agree, Facebook will provide only a simple link of text.

“Our talks with French editors to determine the best experience for users and how we could appropriately compensate our partners are ongoing and will continue,” Doub wrote.

Facebook's move comes as it began a rollout in the United States on Friday of a dedicated “News” tab that will include journalism from partner organisations.

The company has indicated it will pay some of the partners, but details have yet to emerge.

CEO Mark Zuckerberg is under pressure from governments and regulators over the rampant spread of misinformation and outright fake news on its platform, and has vowed new measures to support “quality journalism”.

But the launch of the new section on its app on Friday quickly provoked criticism over the inclusion of Breitbart News, a publication notorious for its role in promoting extreme right-wing narratives and conspiracy theories, international media reported.

French news publishers are already up in arms over Google's refusal to pay for displaying their photos, videos or articles search results, setting up a legal fight over the new EU law.

They say the potential benefit from internet firms sending users to their websites are already not enough to cope with plummeting revenues as readers increasingly abandon traditional media outlets.

On Thursday, French media groups announced plans to file complaints againstGoogle with the competition regulator in France — the first country to ratify the EU rules into national law.

The EU rules create so-called neighbouring rights to ensure a form of copyright protection — and compensation — for media firms when their content is used on websites.

But Google says images and text will be shown in search results only if media firms consent to let the tech giant use them for free.

If they refuse, only a headline and a bare link to the item will appear,Google said, almost certainly resulting in a loss of visibility and potential ad revenue for the publisher.

“Nobody can flout the law, but that's what Google is doing,” saidJean-Michel Baylet, president of the APIG press alliance. “The future of the French and European press is at stake.”

Agence France-Presse, which is not a member of the alliance, is also preparing a separate complaint with the competition regulator.

READ ALSO: Macron: 'No escape' for Google from French copyright law