Facebook’s French subsidiary has to pay 106 million euros in back taxes and penalties to France

French subsidiary of Facebook has agreed to pay 106 million euros ($125 million) in back taxes and penalties following persistent of government efforts to get online giants to pay more taxes where they make their money.

The agreement came after when the  French tax authorities carried out an extensive audit of a decade of Facebook’s operations in the country, from the span of 2009-2018, said  a company spokesperson on Monday.

The company “takes its tax obligations seriously” wherever it operates, said the spokesperson, who was not authorized to be publicly named according to Facebook policy.

The French tax department would not comment on the deal, citing the right to tax secrecy.

Facebook’s French revenues soared last year after the company decided to include advertising income from French companies in its local accounting declarations, instead of declaring them in low-tax Ireland, where Facebook’s international operations are based.

As an effect, Facebook will have to pay 8.4 million euros in profit taxes in France by this year, about 50 per cent  more than last year, said the spokesperson.

The change came in the wake of efforts made by French President Emmanuel Macron and his government to press online powerhouses like Facebook, Google and Amazon to pay more taxes locally.

This push has led to a tit-for-tat tax battle with the US.

France imposed a 3 per cent  digital services tax on global technology giants, and last month the Trump administration announced the plans to impose taxes on $1.3 billion worth of French imports, including handbags and makeup, in retaliation.


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