Facebook To Pay More Than $110 Million In Back Taxes In France (reuters.com) 42
Facebook's French subsidiary has agreed to pay more than $118 million in back taxes, including a penalty, after a ten-year audit of its accounts by French tax authorities, the company said on Monday. Reuters reports: France, which is pushing hard to overhaul international tax rules on digital companies such as Facebook, Alphabet's Google, Apple and Amazon, has said the big tech groups pay too little tax in the country where they have significant sales. Current international tax rules legally allow companies to funnel sales generated in local markets in Europe to their regional headquarters. Some of the tech companies, including Facebook, have European or international headquarters based in countries with comparatively low corporate tax rates, such as Ireland.
A Facebook spokesman said French tax authorities carried out an audit on Facebook's accounts over 2009-2018 period, which resulted in an agreement by the subsidiary to pay a total 106 million euros. Facebook's spokesman also said that since 2018 the company had decided to include its advertising sales in France in its annual accounts covering France. As a result, Facebook's total net revenue almost doubled in 2019 from a year earlier to 747 million euros, a copy of Facebook France's 2019 annual accounts, filed with France's companies registry and seen by Reuters, showed. Facebook France, which employs 208 people, refers to the French tax audit report in its 2019 annual accounts, saying it amounted to a tax adjustment of about 105 million euros. This includes a penalty of about 22 million, the annual accounts showed.
A Facebook spokesman said French tax authorities carried out an audit on Facebook's accounts over 2009-2018 period, which resulted in an agreement by the subsidiary to pay a total 106 million euros. Facebook's spokesman also said that since 2018 the company had decided to include its advertising sales in France in its annual accounts covering France. As a result, Facebook's total net revenue almost doubled in 2019 from a year earlier to 747 million euros, a copy of Facebook France's 2019 annual accounts, filed with France's companies registry and seen by Reuters, showed. Facebook France, which employs 208 people, refers to the French tax audit report in its 2019 annual accounts, saying it amounted to a tax adjustment of about 105 million euros. This includes a penalty of about 22 million, the annual accounts showed.
That will make a dent in this week's profit (Score:5, Informative)
Re: (Score:3)
I was going to say, it sounds like they got away with it and will just pay a nominal little fine that is a fraction of what they really owe.
Re: (Score:2)
I realize you meant this as a joke but it should not be.
France is just one of the many countries served by Facebook. It doesn't seem fair that only France should gather tax. One week's profit is 1.9% tax on profit. If every country served by Facebook demanded a similar tax it would add up to a heavy burden. Given that, it seems like France is asking for too much. Given that few countries ask for tax it seems that Facebook is paying too much tax to too few and paying too little tax in total.
"Has agreed to pay" (Score:5, Insightful)
I just love stories about big tax-evading corporations: regularly, you hear about them "reaching an agreement" with fiscal authorities over millions or billions of dollars of unpaid taxes - usually a small percentage of what they really ought to pay.
Meanwhile, for the rest of us non-tax-evading taxpayers, if you file your tax return a day too late, or you fail to declare one small item in a line somewhere, you're immediately hit by a big fat penalty, and you're promptly put on a list of people in dire need of auditing. And you'd better pay up now and complain later, else the penalty quickly balloons.
How come WE don't get to reach a nice cozy agreement with the taxman and compromise on how much we'd like to pay?
I find those stories really infuriating. Jusk ask them to pay their taxes in full already. No actually, don't ASK them: MAKE them! Like us! Maybe the state would gain some respect from the general population if they quit applying preferential treatment to those with big wads of cash.
Re: (Score:2)
How come WE don't get to reach a nice cozy agreement with the taxman and compromise on how much we'd like to pay?
A) We don't have a massive horde of tax lawyers at our disposal.
B) We can't afford to have a massive horde of tax lawyers at our disposal.
C) We can't afford to bribe elected officials to allow us to determine how much to pay.
Re: (Score:2, Insightful)
Re: (Score:3)
This is not capitalism. In a working capitalist system, the rich pay their taxes too.
Re:"Has agreed to pay" (Score:5, Insightful)
No, they don't. A working capitalist system produces a society where you have an oligopolistic economy and a governing oligarchy with little or no political input from the poor.
Consequently, the really the taxes paid by "the rich" (being the class that has effective political input) are in vast disproportion with the economic inefficiencies that the oligopoly brings about.
Re:"Has agreed to pay" (Score:5, Insightful)
Is it possible to have a system where people, including the rich, get to keep most of their money (after paying taxes), but can’t wield political influence proportional to their fortunes? The problem is that even if you remove such influence from the official goings-on, there’s still the danger of corruption. And even in squeaky clean countries with impeccable officials can we see corruption rear its head when there is enough money on (or under) the table.
Re: (Score:3)
Re: (Score:2)
The way to prevent undue influence is to make sure that no individual or party can ever get too much power. In a democracy that means having coalition governments made up from many small parties and a very high level of transparency.
Re: (Score:2)
We need a method, not a description of the result. What in a democracy guarantees the outcome you describe? How do you prevent the formation of large parties? How do you keep this "transparency" - and come to it, how you even define it?
Re: (Score:2)
Get rid of first past the post and winner takes all. Replace with ranked voting and proportional representation. That fixes the two party system and ensures coalition.
Transparency means most cabinet meeting minutes are published. All funding is declared. All data is published automatically. This wiki article is a decent overview of some of the ideas: https://en.m.wikipedia.org/wik... [wikipedia.org]
Re: (Score:2)
None of this guarantees the absence of behind-the-scenes party deals, undue influence outside of meeting minutes, lobbying, etc.
Most importantly, none of this changes the incentive for "the rich" to use excess money in politics.
Re: (Score:2)
You can never prevent it but you can do a hell of a lot better than the UK and US do.
Re: (Score:2)
but you can do a hell of a lot better than the UK and US do.
You can't. You can slow down the steady erosion of democracy by capitalism for a while, but in the end the aggressive and the well-funded win over, unless you manage to solve your basic problem.
Re: (Score:2)
We need a method, not a description of the result. What in a democracy guarantees the outcome you describe? How do you prevent the formation of large parties? How do you keep this "transparency" - and come to it, how you even define it?
A description of the result is still the important first step. Deciding on an outcome we want needs to precede any discussion on how to get there. For anyone here in software development, you start with the user stories or requirements and then design a system to match them to the best of your ability given your constraints.
Right now we have a voting system (in the US at least) that favors two dominant parties since our first-past-the-post voting method ensures any vote for third party candidates is thrown
Re: (Score:2)
Is it possible to have a system where people, including the rich, get to keep most of their money (after paying taxes), but canâ(TM)t wield political influence proportional to their fortunes?
Possible? Sure. Probable? Hell no. In order for that system to exist a lot of other people have to spent a whole lot of effort to police economic influence on the political process. The total cost could easily become astronomical. It makes much more sense to prevent any one person from becoming that influential in the first place, as it will take a lot less of other people's effort.
Re: (Score:2)
Re: (Score:2)
Stop being ridiculous. There's nothing about capitalism that mandates oligopoly or plutocracy.
Re: (Score:2)
The capitalist system is based on the concept of maximizing return on your capital investment. When capitalism is left on its own, this concept immediately creates very strong incentives to create and exploit monopoly power, and "invest" in government regulations that perpetuate this monopoly, the textbook examples being the robber barons and, of course, the theft called "intellectual property", although there are many more.
As someone already pointed about above, the undue influence of money over politics (
Re: (Score:2)
No, the "capitalist system" is based on people exchanging goods and services in some manner. Free-market capitalism being largely unregulated. It goes downhill (wrt freedom) from there.
Capitalism exists whenever there is any unit of barter - money - being used as a unit of exchange. Capitalism even exists in Communist countries that have any kind of monetary system (with limits on whom is permitted to participate).
I mention this when you start rambling on about "maximizing return on your capital investme
Re: (Score:2)
No, the "capitalist system" is based on people exchanging goods and services in some manner.
Really, now?
You don't even understand why "capitalism" has "capital" in it, cliche man. Hint: it is because the capitalists invest their private capital for profit. This is not an "advanced financial instrument", this is the basic premise.
Another important thing you fail to understand is the simple idea that "investing" (by corruption, a.k.a. lobbying) into the political system may also increases profits, often by much more than hard work.
I even provided examples, which you failed to understand as well. Edu
Re: (Score:2)
Strange, I thought that capitalism means you're allowed to make money, but that in order for society to function, (so contracts are enforceable, and people just can't steal your money with no consequences) it is recognised that you should also pay a reasonable amount of taxes.
What's that got to do with being "rich" or "poor"?
Re:"Has agreed to pay" (Score:5, Interesting)
Also not to forget all taxes should be paid at point of revenue. That is the location that invests in infrastructure and social services to make that revenue possible, so ALL taxes should be paid there. That means in order for any one to tax deduct an overseas cost, that must submit a valid tax return from that location to validate costs and profits and those profits associated with the generation of revenue, will be taxed at the point of revenue, they will not be allowed as a tax deduction, only actual costs for offshore sources, profits associated with that revenue from those offshore sources will be taxed at the point of revenue. On down the line to the last claimed cost. Either that or those cost as tax deduction are disallowed and taxes are paid on the full revenue zero offshore tax deductions.
This totally blocks revenue shiting. If countries do not cooperate, no problem, those cost tax deductions are disallowed and the company pays full taxes on the 'claimed' costs. Every country does the same thing and the tax havens are DEAD, FUCKED, SCREWED and deservedly so, economic pirates of the worst order, stealing other countries social services, leaving those countries citizens to suffer and die, tax havens should be forcibly raided and all data associated with tax crimes and a whole host of other crimes confiscated and use to prosecute ten of thousands of criminals, the worst criminals on the planet.
Re:"Has agreed to pay" (Score:4, Interesting)
Totally agree. Switzerland enjoys a good rep internationally, but in my view Switzerland is a bloodsucker in the middle of Europe. The government of Switzerland actually employs spies and secret police to catch whisleblowers who report tax evasion and fraud, since that is a business that is actively developed and nourished by Swiss banks. They thrive by supporting tax evasion in European countries and the US. This practice is institutionalized organized crime in the heart of Europe.
https://www.taxnotes.com/edito... [taxnotes.com]
https://en.wikipedia.org/wiki/... [wikipedia.org]
Re: (Score:3)
Re: (Score:2)
all taxes should be paid at point of revenue. That is the location that invests in infrastructure and social services to make that revenue possible, so ALL taxes should be paid there.
This view is too simplistic to work in the real world. There are costs associated with other parts of the process; why should taxes not be collected to cover those costs at those other points? You might reasonably argue that taxes should not be collected at any point which does not incur costs, and I for one would tend to agree, but that's not limited to the point of sale. There are in particular other infrastructure costs along the way.
Alternative Minimum Tax (Score:4, Interesting)
Re:Alternative Minimum Tax (Score:4, Interesting)
AMT doesn't just apply to big corporations, and it's a compliance nightmare for those who actually pay attention to it. Many have and will continue to ignore the AMT without ever getting audited (at least in the US).
Re: (Score:2)
Meanwhile, for the rest of us non-tax-evading taxpayers, if you file your tax return a day too late, or you fail to declare one small item in a line somewhere, you're immediately hit by a big fat penalty
I have had my taxes adjusted by the IRS before, once because of not realizing I had hit the alternative minimum tax, but I don't remember the penalties being extreme. And after a quick Google search I found the failure to file penalty to be 5% each month which maxes out at 25%. If that is an example of tax penalties then they don't look out of line for what Facebook just paid. They appear to have paid about $22 million in fines for about $100 million in back taxes.
So nothing here looks too much different to
Re: (Score:2)
Tax attorney here. A few things:
1) Paying or filing a day late is not a big deal and wouldn't result in much of any fines. Even if you forget an item of income on your return, you usually just get a letter asking for payment. It doesn't necessarily put you on any sort of turbo audit list. You only get his with massive penalties if you continue to ignore requests for payments and don't attempt to resolve the matter.
2) The vast majority of individuals have dead simple taxes. They rarely operate in a grey zone
FB "agreed" to pay 14 hours of revenue (Score:2)
It is amazing that 208 people produced 747M Euros! (Score:2, Funny)
That seems like rather a lot, considering that their product consists of electrons, and thus costs next to nothing.
Re: It is amazing that 208 people produced 747M Eu (Score:2)
Re: (Score:2)
Yep Facebook in Europe is run by 208 people, and absolutely no person outside of those 208 people have anything to do with Facebook in Europe /sarcasm
Re:It is amazing that 208 people produced 747M Eur (Score:4, Informative)
Corporation tax in France has no relation to the number of employees. It's based on profits and would be the same level even if they had just one employee there, or even zero.