Facebook is paying more taxes in France as its operations there grow, and it will also pay the country’s digital services tax, according to Laurent Solly, chief of the company’s French unit.
The change Facebook made to its operating model in 2018 to register revenue in France rather than Ireland will increase taxes paid locally, Solly said in an interview with Le Parisien published April 27.
Facebook announced in December 2017 that it planned to record advertising revenues in countries in which it has offices, a decision prompted in part by widespread protests over low taxes paid by internet companies. Like other digital companies, Facebook posted revenue through an Irish subsidiary, leading to criticism from governments and citizens groups.
Solly said the move to register revenue in France was a natural consequence of business growth, noting that its employee headcount has grown from 20 to 200 in six years.
“Facebook has grown, Facebook has changed,” Solly said. “We hired; we became a company installed in France. Before, the invoices were issued by Facebook Dublin, but now they are done by Facebook France. In many respects now Facebook is also a French company, so it was normal to change our system of our tax return. We did not wait for a legal change; we did it at our initiative! It was a matter of fairness.”
In 2017 Facebook paid less than €2 million in tax in France. Finance Minister Bruno Le Maire is leading an effort to ensure that the largest digital companies, known as GAFA in France (Google/Amazon/Facebook/Apple), pay higher taxes through the implementation of a digital services tax. Le Maire has insisted the tax will be temporary until the OECD finalizes its proposal for an international consensus. Solly declined to give specifics on Facebook’s turnover in France, which will form part of the calculation of the DST.
The French DST is in the final stages of legislative review and will affect companies with global digital revenue of at least €750 million and French revenue of at least €25 million. The 3 percent tax on turnover would apply to revenue from online advertising and the sale of consumer data, and to revenue derived from serving as an intermediary between sellers and buyers.
By Teri SPRACKLAND
Cette information est extraite de notre service d'actualité taxnotes.