Monday, October 18

Facebook Spain agrees to pay 34 million euros to the Treasury | Economy

Facebook Spain has reached an agreement with the Tax Agency to pay 34.4 million euros as a liquidation corresponding to corporation tax between 2013 and 2018, EL PAÍS was informed in sources of the process. The multinational has already paid that amount to the treasury, in a first installment at the beginning of 2020 of 14.4 million and in a second payment before the end of 2020.

In the ordinary taxation that the accounts collect, the Spanish subsidiary tripled its tax contribution in 2019 by paying three million euros for corporate tax, compared to the 864,098 euros it paid a year before and the 66,872 euros disbursed in 2017.

At the end of 2019, the tax inspections that the company had open in fiscal years 2013 to 2016 were closed, although those of fiscal years 2017 and 2018 were still open. However, the subsidiary included in its accounts for 2019 the payment of 1.2 million euros as a provision for tax settlements from years prior to 2019. And later, it agreed with the Tax Agency the payment of another 33,145 million euros, thus closing the tax settlements for all the years until 2019.

This agreement of a technology multinational with the Treasury is a milestone in Spain and occurs at a time when controversy is alive over the low tax bill paid by these companies in the countries where they operate, thanks to the tax engineering they apply, and the beginning of the application of the so-called Google rate. The US tech giants have their main headquarters in a country with low taxation and through it they invoice the bulk of their business (subscriptions or advertising), while the subsidiaries of the different countries invoice them only for management concepts. marketing and promotion, so both income and tax payments are meager.

The precedent is the payment by Microsoft to the Treasury of 11.9 million euros that it claimed for the corporation tax for the years 2004 and 2005, but it was not the result of a voluntary agreement, but it was produced after a judgment of the Hearing National. Facebook has preferred to opt for a policy of collaboration with the tax authorities of the countries where it operates. Last August, it agreed to pay 106 million euros to settle legal disputes with the French treasury, which claimed back wages between 2009 and 2018. Previously, the American consortium paid 100 million euros to the Italian treasury to regularize its tax situation and close an investigation for alleged tax evasion between 2010 and 2016.

Business increase

Facebook Spain registered a turnover of 261.6 million euros in Spain in 2019, which is more than doubling (+ 133%) the 112.6 million euros that the digital giant entered in 2018. Despite this increase in business, The company reduced its profits by 4.5% to 513,720 euros, according to the accounts of the subsidiary deposited this week in the Commercial Registry.

However, in the case of Facebook, the caveat is given that since 2018 it invoices an important part of its business in Spain through Facebook Spain, as evidenced by the fact that in 2017 it only declared an income of 10.1 million, which was they have multiplied by 26 in two years.

The Spanish subsidiary divides its turnover into two large items: 11.1 million euros correspond to services that it bills the group for its work as sales support; and the remaining 250.5 million is an item that he calls “own income”, for the billing of advertising space to direct Spanish clients previously contracted to an Irish company. The company does not detail which customers it considers direct and which ones not and limits itself to stating that its activity is that of “reseller of advertising services for designated Spanish customers and provide support and marketing to the Facebook group ”.

The company records in the registry of its 2019 accounts of the covid-19 pandemic, but indicates that it has continued with its commercial operations with reduced interruption and has remained dedicated to carrying out its main activities. As the scale and duration of these events remain uncertain, it is difficult to quantify the financial impact of the current situation. […], but does not expect “a substantial negative impact on its ability to continue as a going concern.”

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