MUNICH (Reuters) – Facebook Chief Executive Mark Zuckerberg accepts that global tax reforms mean the social networking giant may have to pay more taxes in different countries, Politico reported, citing excerpts of a speech he is due to give on Saturday.
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.
“We accept that [the reforms] may mean we have to pay more tax and pay it in different places under a new framework,” Zuckerberg is expected to say in a speech at the Munich Security Conference, Politico reported.
“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,” Politico quoted Zuckerberg’s planned speech as saying.
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 to negotiate new rules for where tax should be paid and what share of profit should be taxed when big digital and other consumer-facing businesses do not have a physical presence in the market, the Organisation for Economic Co-operation and Development (OECD) said last month.
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 U.S tech groups.
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.
(Writing by Paul Carrel; Editing by Keith Weir and Alexander Smith)
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