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Facebook’s Zuckerberg backs big tech digital tax proposals

WASHINGTON, Oct. 23, 2019-- Facebook CEO Mark Zuckerberg testifies before the U.S. House Financial Services Committee during An Examination of Facebook and Its Impact on the Financial Services and Housing Sectors hearing on Capitol Hill in Washington D.C., the United States, on Oct. 23, 2019. (Photo by Liu Jie/Xinhua via Getty) (Xinhua/Liu Jie via Getty Images)
Facebook CEO Mark Zuckerberg will say that Facebook acknowledges it may have to pay for tax as part of new global proposals. (Liu Jie/Xinhua via Getty)

Facebook (FB) CEO Mark Zuckerberg will on Saturday give his backing to global tax proposals that would likely see tech giants pay higher levels of tax.

In prepared remarks for a speech at the Munich Security Conference, Zuckerberg will say that Facebook accepting the scheme “may mean we have to pay more tax.”

The social media boss plans to say that he understands that there is “frustration” with how tech companies are taxed in Europe.

His remarks suggest that Facebook will support the international taxation reform that is being debated at the Organisation for Economic Co-operation and Development (OECD).

Read more: France pauses big tech digital tax to avoid US-Europe trade war

Under the proposals, large global firms would be taxed on their revenue or sales in a particular country, rather than on their profits, which are often booked in lower-tax jurisdictions.

“We also want tax reform and I’m glad the OECD is looking at this. We want the OECD process to succeed so that we have a stable and reliable system going forward,” he will say.

“And we accept that may mean we have to pay more tax and pay it in different places under a new framework.”

Zuckerberg’s support follows a dramatic showdown between the US and France over digital tax proposals.

Last month, France agreed to postpone its 3% tax on the revenues of large digital services companies while similar international proposals were being debated.

Read more: What is the digital services tax? How it impacts big tech companies and the US

The US, which had not been supportive of international proposals, said that the French tax would unfairly target American firms, and, in retaliation, threatened to impose 100% tariffs on $2.4bn (£1.8bn) worth of French goods, including champagne and handbags.

France agreed to put the plan on hold after the US agreed to come back to the table at an international level.

The UK will soon introduce a similar 2% tax on tech giants, and has been reticent to put its plan on hold even after the OECD urged the country to wait for international agreement.