Technology Zuckerberg agrees Facebook will have to pay more tax in Europe, report says
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Facebook CEO Mark Zuckerberg is set to concede in a speech on Saturday that the tech giant should pay more tax in Europe, according to a report in on Friday.
The social network chief is scheduled to speak at a security conference in Munich where he's expected express understanding over Europe's frustrations and accept that his company may need to increase its contributions.
Several British newspapers were shown excerpts of the speech ahead of the event. Facebook didn't respond to a request for comment confirming the reported contents of Zuckerberg's speech.
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Facebook and other large digital tech companies, including Amazon and Google, are under pressure from countries around the world for not paying what is perceived to be their share of taxes. Currently, digital companies are only required to pay tax on their profits in companies where they have a physical headquarters. This allows them to take refuge in countries such as Ireland, which is popular among US tech companies due to its relatively low taxes.
A group of 137 countries is currently trying to overhaul current corporate tax rules in order to force digital companies to pay more tax on their products and services in all the countries where they operate. Such plans have been attacked by President Donald Trump as being discriminatory towards US companies. Trump has threatened countries developing their own taxation plans with tariffs and warned that levies may affect future trade deals.
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Earlier this month, under such a threat, France agreed to postpone the introduction of its digital tax until the end of the year. Meanwhile, the UK is currently considering its own options for asking tech companies operating in the country to contribute more.
Leading the charge for tax reform is the Paris-based Organisation for Economic Co-operation and Development (OECD), which said changes could bring in around.
"We want the OECD process to succeed so that we have a stable and reliable system going forward," Zuckerberg will reportedly say Saturday. "We accept that may mean we have to pay more tax and pay it in different places."
The OECD aims to reach an agreement by the end of the year, which it hopes will boost revenue across the board while avoiding trade wars between the US and countries keen on implementing changes more hastily.
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Facebook: Zuckerberg: "We accept that we will pay more taxes in the future"
• Facebook founder Mark Zuckerberg comes to the Munich security conference this Saturday.
• There he wants to talk to the heads of state and government and representatives of the EU Commission about the taxation of digital corporations.Zuckerberg: "We accept that we will pay more taxes in the future"
In view of the massive criticism of the deficient taxation of American tech companies in Europe, Facebook founder Mark Zuckerberg is trying to limit the damage. This Saturday he comes to the Munich Security Conference and wants to convince European politicians that Facebook is a good taxpayer. Meetings with heads of state and government and representatives of the EU Commission are planned in Munich and then in Brussels. Unlike many industrial companies,
digital corporations such as Facebook and Google pay very little tax on their billions of euros in Europe. Traditionally, profits are taxed by companies in the country in which they have their headquarters or production. Digital corporations operate worldwide via the Internet. They like to set up their headquarters in countries with low tax rates, for example Ireland or the Netherlands. According to figures from the EU Commission, they effectively pay an average of ten percent taxes, while other companies pay more than 20 percent.
Zuckerberg wants to contradict this in Munich. Facebook pays all taxes that are required by law; in the past five years, this was an average of more than 20 percent. It is also not correct that Facebook is against changing the existing tax system. In the background, Facebook representatives admit that no one in Europe believes that.
In Munich Zuckerberg therefore wants to say according to the speech manuscript: "I understand that there is frustration about how tech companies are taxed in Europe. We also want a tax reform and I welcome the fact that the OECD is dealing with it." The industrialized country organization is currently looking for a unified line on this issue. "We want the OECD process to be successful so that we can have a stable and reliable system in the future," added Zuckerberg. "And we accept that a new set of rules could mean that we will pay more taxes in the future, in different countries."
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