August 25, 2020

Andrew Campbell 

A Facebook’s spokesperson said on August 24 that the company’s French subsidiary has agreed to pay 106 million euros (US$125 million) in back taxes and penalties of 22 million euros. The tax settlement came after French tax authorities carried out an extensive audit of Facebook's operations in France from 2009 to 2018 following persistent government efforts to get social media giants to pay more taxes where they earn their money.

The dispute came due to efforts from French President Emmanuel Macron and his administration to charge online giants like Facebook, Google, and Amazon with more local taxes. France has imposed a 3% digital services tax on global technology giants. In retaliation, the US government announced plans in July to impose taxes on US$1.3 billion worth of French imports, including handbags, makeup, and wines.

France has repeatedly stated that digital companies operating in France, known as “Les GAFA”, for Google, Amazon, Facebook, and Apple,  should declare their incomes earned in France and pay proportionate tax.

Therefore each company has come to a tax settlement separately, with Google’s settlement reaching 1 billion, Amazon at 200 million, and Apple at 500 million respectively.

Photo:Webshot.