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US tax authorities claim $ 9 billion in back taxes from Facebook


American justice wants to know the real value of technology transfers made by the Californian group to one of its subsidiaries in Ireland.

Facebook and the US tax authorities, the IRS, have been fighting since February 18 in a lawsuit that could call into question the tax arrangements that the Gafa have put in place to reduce their tax rate. American justice seeks to know if the giant of Silicon Valley has voluntarily undervalued the value of its exchanges of intellectual properties in order to limit its taxes in the United States.

In 2010, Facebook had carried out technology transfers with one of its European subsidiaries in Ireland, known for its low tax rate. The US tax authorities claim that Facebook underestimated the value of these internal transactions in order to reduce the amount of its tax due in the United States. The tax bill is estimated at $ 9 billion according to the government agency. Facebook, on the other hand, maintains that the amount transferred by its Irish subsidiary was actually greater than the real value of these assets at the time, arguing that it was too heavily taxed by the American state. " We are anxious to present our arguments before the judge and to put an end to this litigation of several years " comments a Facebook spokesperson, Bertie Thomson, in an email sent to AFP.

While several senior officials should be heard during this trial, one of the spokespersons of the social network, Bertie Thomson recalls that these transactions date from a decade. In 2010 " [...] when Facebook had no revenue from mobile advertising, when its international activities were in its infancy and when its digital advertising products had not yet proven themselves ". " Our business has gone through ups and downs, but we are taking on the actions we took over ten years ago, at a time when our business was exposed to great risks and uncertainties, " she adds.

Rethinking the taxation of digital giants

This lawsuit comes while the agreement on the taxation of digital companies is still being negotiated within the OECD. Facebook boss Mark Zuckerberg declared in favor of a tax overhaul at the Munich conference, even if this would lead the group to " pay more taxes" ".

This case revives the debate on the transfer of profits from large multinational tech companies to countries with reduced taxes. The American tax authorities had already denounced this type of optimization by suing the giant in August 2019, without success. This judgment could become a major precedent, marking a change in attitude of American justice in the face of these tax activities increasingly criticized by the States.

The debate is particularly lively within the European Union. Ireland is often described as a tax haven for web giants, like Google or Apple, which have their European headquarters there. With its corporate tax rate of 12.5%, and attractive tax treaties like the one signed with Apple, the attractiveness of the country continues to grow despite the European will to harmonize its rates or impose a tax common to Gafa.

Source: lefigaro

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