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Facebook to pay $125 million in back taxes to France

August 25, 2020

The Facebook settlement comes as French authorities continue their efforts to make US tech giants pay more taxes locally. The massive payout follows a thorough audit of Facebook's French operations from 2009-2018.

Facebook and Euro
Image: picture-alliance/NurPhoto/A. Beqiri

Facebook on Monday said it had agreed to pay $125 million (€106 million) in back taxes to the French government covering a ten-year period ending with 2018.

The agreement came after tax authorities carried out an extensive audit of the social media giant's operations in France.

Facebook said in a statement: "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."

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The social media conglomerate said it had changed its sales structure since 2018 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% compared to last year," the statement continued.

"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."

French-US tax feud

The taxation of US tech companies in Europe has been the subject of a longstanding battle between France and the United States. Many US firms have their EU headquarters in low-tax-regime countries.

However, French President Emmanuel Macron and his government have been pressuring online giants like Facebook, Google, Twitter and Amazon to pay more taxes in the countries in which they operate.

Read more: Opinion: The absurdity of TikTok spying allegations

The move from Macron has led to a tit-for-tat tax conflict with Washington.

In July 2019 France imposed a 3% digital services tax on global tech powerhouses, which has since been delayed until the end of 2020. Last month, the White House announced plans to impose taxes on $1.3 billion worth of French imports, including handbags and makeup.

jsi/dj (AFP, AP)