There is a lot of information on the tax affairs of the most popular network in the world that still need to be clarified and it seems like it doesn’t get much exposure as it should. Almost half of the global revenue of Facebook is being declared through Ireland because of their low corporate tax regime. Facebook Ireland has reported pre-tax profits where they earned about 7.9 million and they had to pay of 2.3 million, but Facebook actually paid zero taxes in the UK on 2013.
All companies have expenses ad Facebook actually employs over 500 people in Dublin alone. Facebook Ireland Ltd was said to have paid 1.5 to be able to have licensing to use the Facebook name and more money went into Facebook Inc. Other marketing companies that support FB also got paid. Those are the kind of arrangements that George Osborne is hoping to be able to work with in the “Google tax” that is going to be taking 25% of all of the profits that are made by any multinational in Britain.
Ireland has been attracting a lot of multinational behemoths such as Apple, Google, Microsoft and other powerful companies. This has happened because they are drawn in by the tempting 12-5% corporate tax rate. There will always be ways for huge companies to pay a lot less money than they do right now, but this doesn’t mean that they will not be paying taxes at all.
Facebook is a very profitable business and they will obviously look for the best ways to cut back on taxes and maximize revenues as long as they are not breaking the rules. What they do is bend the rules just enough without breaking them and that is how they stay in the gray area which is considered to be as legal as the white one.
We can expect the largest corporations to always find ways to avoid huge tax payments and they will find the most creative ways to get around them. The most important thing to keep in mind is that these companies should always be watched by the rest of the world. They need to pay their taxes and they have to be responsible about this. The consequences of large corporations not paying their taxes can be terrible for us and that is a god reason to always keep a close eye on them.
Sharon Callix
Award Winning Social Media Consultant, UK, 2014
Platinum Expert Author EzineArticles
