Mr Zuckerberg says he welcomes international reforms to how tech companies are taxed. (AP: Trent Nelson via The Salt Lake Tribune)
Facebook chief executive Mark Zuckerberg accepts that global tax reforms mean it may have to pay more taxes in different countries, excerpts of a speech he is due to deliver in Germany show.
- The OECD is pushing for a new global system of taxes on tech companies
- Facebook only paid $55 million in taxes in the UK in 2018 while making $3.19 billion
- The company has postponed the EU launch of its dating app due to privacy concerns
Cross-border tax rules are set to be rewritten after 137 states sought last month to avoid a new trade war over the global multiplication of taxes on digital services, prompted by some countries preparing to go it alone.
“I understand that there’s frustration about how tech companies are taxed in Europe. We also want tax reform and I’m glad the OECD is looking at this,” Mr Zuckerberg is expected to tell the Munich Security Conference.
“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.
Amazon, Facebook and Google have strained existing rules because they are able to book profits in low-tax countries like Ireland, no matter where their customers are.
Government officials agreed last month to negotiate new rules for where tax should be paid and what share of profit should be taxed, the Organisation for Economic Co-operation and Development (OECD) said.
A growing number of countries are preparing national digital taxes in the absence of a major redrafting of the rules, despite Washington’s threat of retaliatory trade tariffs because it sees such levies as discriminatory against big US tech groups.
Mr Zuckerberg’s speech excerpts gave no further details on tax rates.
Facebook says it pays all the tax it should and that this has averaged more than 20 per cent over the last five years.
The social media giant faces increasing scrutiny from governments around the world. (AP: Ben Margot)
In Britain, Facebook paid just 28.5 million pounds ($55.2 million) in corporation tax in 2018, despite generating a record 1.65 billion pounds ($3.19 billion) in British sales, media reports said.
Tax officials have only a few months ahead of an early July deadline they set for a deal on the complex technical parameters. They aim to reach a full deal by the end of 2020.
During his visit to Europe, Mr Zuckerberg is due to meet the EU’s digital and industry chiefs on Monday.
That comes two days before European competition and digital commissioner Margrethe Vestager and internal market commissioner Thierry Breton are set to announce the creation of a single European data market aimed at challenging the dominance of US tech giants such as Facebook, Google and Amazon.
Dating application launch postponed
Facebook announced it had postponed the rollout of its new dating services in the EU after Ireland’s Data Protection Commissioner (DPC) raised concerns about the launch.
Some worry that Facebook’s stated commitment to privacy will buckle under the need to make money. (Facebook)
They allow users to integrate their Instagram accounts with Facebook’s dating profile and add Instagram followers to their “Secret Crush” lists.
Ireland’s DPC, the main regulator in the European Union for a number of the world’s biggest technology firms including Facebook, said it was told about the February 13 launch on February 3 and was very concerned about being given such short notice.
The DPC said in a statement that those concerns were further compounded when it was given no documentation regarding data protection impact assessments or decision-making processes that had been undertaken by Facebook.
To expedite the process, DPC officers conducted an inspection at Facebook Ireland offices in Dublin on February 10 and gathered documentation, it said.
“Facebook Ireland informed us last night that they have postponed the rollout of this feature,” said the regulator, which has a number of privacy investigations open into Facebook and its WhatsApp and Instagram subsidiaries.
“It’s really important that we get the launch of Facebook Dating right so we are taking a bit more time to make sure the product is ready for the European market,” a Facebook spokesperson said.