Zuckerberg accepts Facebook will have to pay more tax
OECD to look at changing the way global tech giants pay corporation tax
Mark Zuckerberg, the founder and CEO of Facebook, has said the social media giant will have to pay more tax.
“I understand that there’s frustration about how tech companies are taxed in Europe,” he is due to tell a conference tomorrow. “We also want tax reform and I’m glad the OECD (Organisation for Economic Co-operation and Development) is looking at this.”
It may seem strange that Zuckerberg welcomes changes that will mean his empire paying more, but it comes down to stability, he is due to explain to a conference in Munch.
“We want the OECD process to succeed so that we have a stable and reliable system going forward. And we accept that may mean we have to pay more tax and pay it in different places under a new framework,” he added.
The need for the OECD to address global tax differentials arose when some countries – notably the UK and France – began to moot the idea of imposing stricter tax laws on global tech giants. They claimed they had an unfair advantage over domestic traders.
In 2018, Facebook paid £28.5m (€34m, $37m)in UK corporation tax despite generating a record £1.65bn in sales.
In an attempt to stop any such trade war developing 137 countries last month agreed to rewrite cross-border tax rules on digital services.
Facebook, along with Amazon and Google have utilising the existing rules by booking profits in low-tax countries such as Ireland, irrespective of where the customer, and transaction, occurred.
Under the new rules, where tax should be paid and what share of profit should be taxed will be reviewed.
FURTHER READING: UK to go ahead with tech tax, despite threat from US
FURTHER READING: France and US in trade row over digital tax