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

PARIS: US social media giant Facebook on Monday said it had agreed with the French government to pay 106 million euros ($125 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.

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. Many have their EU headquarters in low-tax-regime countries.

"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 euros ($9.98 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 euros."

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.

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.