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Apple reaches 500-mln-euro tax settlement with France
PARIS, Feb 6, 2019 (BSS/AFP) – Apple said Tuesday that it had reached an
agreement with French authorities to settle 10 years of back taxes, becoming
the latest US company to make a deal with France, which has led a European
push for higher taxes on tech giants.
Apple paid nearly 500 million euros ($570 million) to resolve the case in
a confidential settlement reached in December, a source familiar with the
case told AFP, confirming a report in French news weekly L’Express.
“The French tax administration recently concluded a multiyear audit on the
company’s French accounts and an adjustment will be published in our public
accounts,” Apple said in a statement.
“We know the important role taxes play in society and we pay our taxes in
all the countries where we operate, in complete conformity with laws and
practices in force at the local level,” the company said.
French authorities declined to comment further, citing the confidentiality
of tax matters.
– French tech tax looms –
Apple is one of several American technology giants in the line of fire in
Europe over their tax strategies, which see them route their income through
low-tax nations such as Ireland or Luxembourg.
In 2016, it was ordered by the European Commission to pay 13 billion euros
in back taxes to Ireland.
The European Commission said Apple paid an effective corporate tax rate of
just 0.005 percent on its European profits in 2014 — equivalent to just 50
euros for every million.
The deal in France comes as the government prepares to push ahead with its
own unilateral “GAFA tax” — an acronym of Google, Apple, Facebook and Amazon
— faced with the failure of EU members to agree on how to get technology
companies to pay more tax on their European operations.
The levy, to be put to parliament in a bill this month, would affect
companies with global sales of more than 750 million euros and 25 million
euros in France.
It would be retroactive to January 1 and is expected to raise 500 million
euros this year.
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French Finance Minister Bruno Le Maire has called the question of how and
where global companies pay their taxes “a major issue in the 21st century”.
But an agreement among EU members has proved elusive.
Ireland, Denmark and Sweden have all blocked plans for a levy for fear of
dissuading investment, and Germany has proved lukewarm on the issue, fearing
US retaliation against its car industry.
The issue has been referred to the Organisation for Economic Cooperation
and Development, which aims to come up with an international agreement by
2020.
– Scramble to settle –
According to L’Express, the deal between France and Apple was clinched
after several months of talks, and concerned the small amount of revenue the
firm booked in France even as the sales it reported in Europe ballooned.
The report said Apple’s European revenues exploded seven-fold, from 6.6
billion euros in 2008 to 47.7 billion in 2017, most of which was booked in
Ireland where Apple has its European headquarters.
At 12.5 percent, Ireland’s corporate tax rate is much lower than in
France, where companies pay 33 percent tax on their profits.
Apple insisted Tuesday that it was contributing to the French economy,
saying it had invested 800 million euros on outsourcing in the country in
2018.
It is the second US tech heavyweight to reach a settlement with French tax
authorities in the past year.
In February 2018, Amazon said it had settled a French claim for nearly 200
million euros and would start declaring all its earnings in the country,
ending a dispute that had dragged on for years.
In 2017, however, France’s tax collection drive suffered a setback with a
local court ruling that Google was not liable to pay 1.1 billion euros in
taxes claimed on revenues transferred from France to Ireland.
Anti-globalisation groups have criticised the government’s push to settle
cases out of court.
“If you steal to eat you go to prison. When the GAFAM (GAFA plus
Microsoft) steal billions the state does an out-of-court deal,” the anti-
capitalist group Attac France tweeted on Tuesday.
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