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FACEBOOK PAID £0 in corporation tax in the UK last year, despite making an estimated £371 million (€470 million) in revenue in the region in 2013, its latest financial filings with Companies House reveal.
None. Zero. Zilch. Nada.
Facebook is among other US companies such as Amazon and Starbucks that have been criticized in recent years because they generate substantial revenues in the UK but only pay a small amount (or in this case, nothing at all) in corporation tax.
Facebook, like some of its US technology counterparts, funnels its UK sales via its Ireland subsidiary where corporation tax rates are lower, at 12.5%.
In the UK the rate in 2013 was 24%.
This has previously been the case with Facebook.
According to the annual report and financial statements Facebook filed Tuesday with Companies House, the company declared £49.8 million in revenue in last year (up from $36.55 million in 2012, when it also paid no corporation tax). Research company eMarketer, however, has estimated Facebook generated £371 million in UK revenue in 2013.
The official filings also declare that Facebook posted an operating loss of £11.6 million in 2013. That’s up a substantial amount from the $3.85 million loss it posted in 2012 — a period it has previously said was “an anomaly year” given the costs associated with its IPO. Corporation tax is only paid if a company posts a profit.
The company would have had to pay a UK corporation tax charge on its loss for the year of $5,089 (£3,169), but that was wiped out by a $292,024 (£182,027) adjustment credit made on previous periods.
The document says that this year’s “anomaly” accounting for its operating loss was “share based payments”, paid out to its 208 London staff, who have received big compensation packages as the company continues to perform well worldwide.
It took a “share based payment charge” of £15.5 million. In total, UK employees collected 1.5 million free shares last year, currently worth $119 million based on the company’s current stock price.
Wages and salaries for its staff totalled £21.99 million, meaning the mean average annual Facebook UK employee salary was almost £106,000. It’s worth bearing in mind that all UK employees pay personal taxes on their income and stock-based compensation to the UK’s HM Revenue and Customs.
Facebook declined to comment.
It has previously been suggested that Facebook had taken advantage Double Irish tax structure here in Ireland.
Minister for Finance Michael Noonan moved to close this controversial tax loophole in Budget 2015, has pitched a new “knowledge-development box” to lure business investment instead.
- Lara O’Reilly, additional reporting by Nicky Ryan
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The Irish government help super rich companies pay no tax while screw the struggling Irish people for water tax
A tiny percentage of something beats a huge percentage of nothing.
They aren’t here for the workforce.
Consider it Ireland’s gain to the UK’s loss.
Wish the taxman took the same approach with me. I have to pay all taxes like 99% of people. These companies are abusing the system. It a bit rich the govt aiding the seperation of equality with regards tax.
Did you not listen to the budget announcements last week, and the phasing out of the double-Irish? In any case, the double-Irish is not the result of anything that the Irish Government set out to do; it is simply a result of differences between how the US taxes companies and how Ireland and other countries tax companies.
Doesn’t matter which countries are winning or losing out of this . The fact remains that it’s pretty shameful that these massive companies are ruling the roost.
What instead of governments.
Mark Zuckerberg & zero others likes this.
Facebook HQ is in Dublin with regional offices in London and elsewhere in Europe. Just like Ryanair based in Dublin and operate in many European countries. Pays its C.T in Ireland. This is nothing unusual. Happens all over the world. The UK government gave lots of tax deals over the years to companies operating in the city of London.
Great place for big multi nationals is our little island. Pay sweet F A tax and get free Labour with jobbridge.
Suppose that’s why we now need to pay water tax to prop up the tax regime for the poor multi trillion dollar company’s.
Well done FG and FF for this amazing tax scam
Seriously, leave the water charges out of one article please!!!
Sick of the water tax debate. The amount you have to pay is minuscule compared to USC. We should start focusing on the big ticket items. As above this is a separste issue.
Do you bother to research before you write? Corporation tax income in Ireland in 2013 was over EUR 4.2 Billion. Multinational corporations pay a significant percentage of that. It is only a very small number which arbitrage the differences in treatment of corporation tax between the US and other jurisdictions in order to reduce their effective rate to very low rates.
Furthermore, I doubt that any multinationals use jobbridge. Even if they do, so what, if it provides the person concerned with good experience which helps them to get a permanent job at the end of the term.
Facebook is Irish registered for all operations outside the US and Canada.
For now.
Revenue is not the same as profit. They could have made £371 in revenue and zero profit. Unlikely, but possible.
Taxes are due on profits, not revenue.
Im a little bit happy…..
Im just wondering whats going to happen when these loopholes are eventually closed…some of them at least…what are we going to do then?
have your say