Mark Zuckerberg has acknowledged the pressure on Facebook to pay more tax on earnings in Europe, and said his company is ready to do so.
The social media giant has come under growing pressure to pay more in taxation, after using loopholes to keep its tax bills low.
In the UK alone, Facebook generated £1.65 billion in sales during 2018, but paid just £28.5 million in tax – or 1.7%. At the time, Facebook simply said it pays what it owes, but Zuckerberg now appears to have softened his stance, claiming that he understands the frustrations many people have with how US tech giants are taxed in Europe.
At a conference in Munich, Zuckerberg claimed Facebook actually wanted to see tax reforms rolled out across the continent, to provide “a stable and reliable system going forward.” If such a system required paying more in tax, he’d be happy to accept it.
Tech taxation has become a hot topic over recent weeks, with the UK supposedly drawing ire from the USA for considering a new ‘digital sales tax’ that could bring the exchequer up to £500 million a year. The process is far from straightforward, with French authorities considering a similar move in recent months, only to back down amid reported pressure from the US – including a warning of new tariffs on champagne and cheese. Surely enough, US Treasury Secretary Steve Mnuchin met the UK’s announcement with a threat to impose a tariff on UK-made cars if the digital sales tax (which he labelled “discriminatory”) is rolled out.
To compound matters, the resignation of Sajid Javid has thrown the issue into fresh uncertainty, as the former Chancellor was thought to be one of the new tax’s biggest cheerleaders. His replacement, Rishi Sunak, hasn’t yet announced his position, though the upcoming Budget announcement on 11 March could make it all much clearer indeed.