Meta Platforms Inc (META)

[Investors3]

Facebook's Zuckerberg Says He's Willing to Pay More Taxes in Europe
By Parmy Olson and Paul Hannon

https://ih.advfn.com/stock-market/NASDAQ/facebook-FB/stock-news/81762078/facebooks-zuckerberg-says-hes-willing-to-pay-more

Facebook Inc. is willing to pay more tax overseas and supports a proposed global levy on tech giants, according to a speech Chief Executive Mark Zuckerberg is set to give Saturday.

"We accept that [the reforms] may mean we have to pay more tax and pay it in different places under a new framework," Mr. Zuckerberg is expected to tell a conference in Munich. "I understand there is frustration about how tech companies are taxed in Europe."

The Facebook founder is also set to endorse a proposed global tax plan from the Organization for Economic Cooperation and Development, according to the text of the speech reviewed by The Wall Street Journal. "We also want tax reform and I'm glad the OECD is looking at this," he is expected to add.

The taxation of big tech firms has been a source of growing consternation among politicians and consumers globally, prompting lawmakers from dozens of nations to explore new tax rules.

The OECD said last month that 137 nations had agreed to continue discussing its plans for global taxation of multinational corporations -- including those that dominate the digital world.

However, the OECD plan could be complicated by a U.S. proposal that would allow businesses to choose whether or not to be subject to a future regime. The U.S. idea has been met with broad opposition from other governments and the OECD.

Mr. Zuckerberg's comments come against a backdrop of looming threats from President Trump against countries looking to impose their own digital taxes. France last month agreed to postpone a levy on tech companies after the U.S. threatened a 100% tariff on French imports including wine.

By publicly siding with the OECD, Mr. Zuckerberg is backing the least painful proposed regime, according to Richard Murphy, an economics professor at City University London, who has advocated for stricter rules on large tech firms.

While individual countries have generally sought to take a greater percentage of revenue from tech companies, the OECD's proposals are more moderate, he said.

"I don't think [Mr. Zuckerberg] could have backed any other alternative, " Mr. Murphy added. "His choice was back the status quo, or the OECD, or each country. He was never going to go for the last option."

European nations have become frustrated with Silicon Valley and argue that technology companies shift profits to pay lower taxes.

Firms like Apple Inc., Alphabet Inc. and Facebook have booked tax rates of less than 10% on their profit overseas. Companies say they pay the appropriate tax in each country where they do business.

Mr. Zuckerberg's comments aren't the first from a tech company to support international rules. Alphabet Inc.'s Google said in a blog post last year that it supported the international tax proposal being pursued by the OECD.

Tech companies have also sought multinational rules on other matters. In January, Google chief Sundar Pichai used a speech to push for "sensible regulation" from the European Union around artificial intelligence.

And in January, Airbnb Inc. publicly called for the EU to take charge of a regional system for registering hosts that use its home-sharing website. That proposal could protect it from more stringent measures put in place by individual cities.

But Mr. Zuckerberg's comments could still put him at odds with U.S. officials.

U.S. Treasury Secretary Steven Mnuchin has railed against international proposals to tax Silicon Valley more. In remarks to the Journal in January, he warned that Britain and Italy could face U.S. tariffs if they proceeded with any such measures. Those proposals are currently on hold.

Mr. Mnuchin said the truce struck by the U.S. and France in January was "the beginning of a solution."

Write to Parmy Olson at [e-mail] and Paul Hannon at [e-mail]