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FACEBOOK CEO MARK Zuckerberg has said he will receive no tax benefit from donating billions to charities.
Zuckerberg and his wife, Priscilla Chan, created the Chan Zuckerberg Initiative following the birth of their daughter Maxima.
Over his lifetime, Zuckerberg plans to give away 99% of his Facebook shares, valued at the equivalent of €42 billion, to various initiatives.
However, he has moved to address criticism that this move could result in him paying less tax.
“The Chan Zuckerberg Initiative is structured as an LLC [Limited Liability Company] rather than a traditional foundation,” Zuckerberg explained. This structure behaves like a corporation.
As Bloomberg explained during the week, there are four main benefits to an LLC: There’s no limits on lobbying, it can turn a profit, it can get more involved with the private sector, and is not required to give away 5% of its value each year in donations.
Using an LLC will also give Zuckerberg more freedom over who they choose to fund.
“It will enable the creative and flexible use of capital over time,” Jacob Harold, chief executive of nonprofit database GuideStar, told The New York Times.
In a post today, Zuckerberg said:
By using an LLC instead of a traditional foundation, we receive no tax benefit from transferring our shares to the Chan Zuckerberg Initiative, but we gain flexibility to execute our mission more effectively.
In fact, if we transferred our shares to a traditional foundation, then we would have received an immediate tax benefit, but by using an LLC we do not. And just like everyone else, we will pay capital gains taxes when our shares are sold by the LLC.
“It’s buying optionality, so that down the road they could still decide to direct money to nonprofits or they could choose to invest in really cool solar energy companies that are doing a lot of good.”
The Facebook co-founder is one of the world’s wealthiest men.
He and Chan, a 30-year-old pediatrician, have previously donated $100 million (€91.8m) to public schools in Newark, New Jersey, and pledged $120 million (€110m) to schools in poor communities of the San Francisco Bay Area.
They’ve also given $75 million (€68.9m) to the Zuckerberg San Francisco General Hospital, where Chan did her medical training.
Additional reporting by The Associated Press
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Even if he was doing it to avoid tax, so what!!! He’s doing something positive and it should be celebrated not critisised.
Why?
He’s a tax dodger all across the planet depriving poverty stricken economies like Ireland of much needed revenue.
As a result he accumulates vast wealth then makes a big song and dance about giving the illegally gotten gain back to charity.
Did it never occur to him that if big corporations like Facebook paid their fair share of tax there would not be a need for philanthropic initiatives like this one.
Is he that stupid?
Philanthropy only makes up for the failings of government and is something to make you feel better, in this case about avoiding tax
Define a fair share of tax? As far as i’m aware facebook are tax complient in the jurisdictions in which they opporate. All i know is that if it wasnt for the likes of facebook, google, microsoft, intel et al then i personally wouldnt be able to afford the things that i can afford. These companies provide vast wealth to economies, both directly and indirectly and thats why governments want them in their countries! To suggest othewise is stupid
Poverty stricken economies like Ireland?????
What? you’d rather give it to a government to be divvied out by politicians so they win the next election? Rather stupid logic.
Ikea is a “charity” that makes no profit and pays no tax. Clever move
i.e. give your money to someone else in the hope they’ll use it better than you could.
Spot on…and Bill Gates is another one…pushing contaminated vaccines on Africans…nasty people…
Agreed, Darren. A person may still do good even on foot of an ulterior motive. Would people really prefer that he kept it in gold, in a Swiss vault? It should be noted that these benefits will come ‘over his lifetime ‘. Nonetheless, if ANY of the super rich occasionally take the crowbar to their wallets it can only be a good thing. (so many wouldn’t give anyone the proverbial steam) A close eye can always be kept on what may be bought by this largesse
What have the Africans ever done to you?
Facebook paid just £4,327 in corporation tax in Britain last year.
In 2013 – Zilch.
In 2012- Zilch.
How was this managed:
Simple.
Facebook made an accounting loss of £28.5m in Britain in 2014, after paying out more than £35m to its 362 staff in a share bonus scheme. Operating at a loss meant that Facebook was able to pay less than £5,000 in corporation tax to HM Revenue for the year.
The share scheme was worth an average of more than £96,000 for each member of staff. Once salaries were taken into account, a British employee of Facebook received more than £210,000 on average. Revenue – £4,327.
Smoke and mirror accounting.
But yeah, Mark is a hero.
He gives billions to charity.
(just don’t ask how he accumulated his wealth)
So by your reckoning it would be better to give his money to a poxy government that will line each others overstuffed pockets and pay millions to their advisors (who will tell them to line the bankers pockets) and thenSo by your reckoning it would be better to give his money to a poxy government that will line each others overstuffed pockets and pay millions to their advisors (who will tell them to line the bankers pockets) and then maybe a fraction will get into the economy.. Fair play to him and hopefully there will be a few more like him
Socialists love tax
@ Tommy
Tommy – those share scheme awards that Facebook UK paid to employees would have been subject to Income Tax in the hands of the employees.
Income Tax for employees earning more than £210,000 in 2014 in the UK was 45%.
Corporation Tax in the UK in 2014 was 21%.
So be paying out this amount as a share award subject to IT rather than retaining it and paying CT, Facebook actually contributed DOUBLE to HMRC.
Tommy, it’s the government you should be whining about and not MZ. Unless you can tell me different he is operating within the government’s laws. The government’s laws allows him to pay minimal tax. Nothing illegal. Anyone that says they wouldn’t use accounting methods to pay less tax within the confines of the law is either a liar or a fool.
Governments bow to pressure from large corporations for a relaxation of tax laws.
A form of economic blackmail.
Correction, socialists loved decent public services that aren’t based on how much money you have in your pocket
Sure Tommy.
Generally people avoid tax to enhance their wealth.
So this chap is donating 99% of his wealth to avoid paying tax. What are you whingers complaining about!!!!!
Tommy one thing i will say; at least his money isnt going into tax which in turn most of which goes to banks to service the neverending debt lumped on us/ every other nation on earth.
I see all my paye go to those rotten filthy banks and ecb and it makes me want to leqve the country.
Tommy Ireland certainly has had …and still does have legacy issues to deal worth from the banking crisis but to call Ireland ‘s economy poverty stricken or ridden is a bit dramatic
@TimOutrage
sick people on trolleys in hospital hallways love tax
a friend of mine was on facebook last week
she was bullied because she asked how many have France murdered with air strikes
she was asked are you an ISIS supporter etc
The necessity for charity is an indictment of the capitalist system and it’s compliant governments which fail to meet the basic needs of large sections of the population in even the most developed countries like the U.S.
The U.S is a sovereign currency issuer, creates dollars at will and so has no need of charitable contributions from Zuckerburg to fund schools in New Jersey or hospitals in California.
If the school lacks teachers or the hospital needs equipment then that is a result of U.S. government policy. The U.S. can always afford to buy whatever resources are for sale in the dollar including the labour of teachers, doctors or whatever equipment is available for purchase.
Interestingly there was no limit to the amount of dollars which suddenly magically appeared when the delinquent and parasitic financial system crumbled and was propped up with the incredible sum of $29 trillion by the state.
“poverty stricken economies like Ireland”
You badly need to educate yourself Tommy.
There are billions of people in the world living in real poverty.
If there were no rich or poor people in the world and ALL wages were divided out equally throughout the world, the average wage would be less than €10,000.
Pretty simple. If he avoids more in tax that he donates to charity then whatever country he is in has a net loss to deal with. Less money in circulation because Zuckerberg saved more money from not paying tax than he did in donations. If he donated more than avoided in tax then happy days but why avoid tax in the first place?
The much maligned Michael OLeary doesn’t use accounting tricks to minimise his tax. He’s allegedly the largest indvidual taxpayer in Ireland. Abrasive he may be, but I don’t think he’s either a fool or a liar.
Large or small tax payers it doesn’t make a difference. It’s the % of wealth that get re circulated into the economy that counts. 10,000 poor people who’s wealth gets re spent on a weekly basis to buy essential good etc are a lot more beneficial to the economy than one rich person who’s wrath accumulates (maybe off shore) never to be circulated back into the economy. An economy cannot survive without the continuous circulation of money
Tim, you have taken arseholery and boring crap to an absolute art form. Fair play to you. Look forward to seeing you featured in “The Ticket”.
Tommy – I presume you don’t pay only the tax you are asked for and instead offer up substantially more right?
But to the burning question … are water charges a “tax”?
And the cost of living would decrease accordingly, Tom. What would be wrong with that?
Our democratic system is incredibly flawed and there is certainly waste and excess. However, there is a big difference between the state having the right to tax corporations so that all citizens can have a basic standard of living, and billionaires avoiding meaningful taxation in ALL jurisdictions, only to decide to give this tax free stash away. One is bases on the rights of all and the other is based on the whims of a few. The latter is effectively a return to feudalism in my opinion.
He could be the largest individual taxpayer in the country and still be using accounting tricks to minimise his tax liability, no? I’m not sure a man who buys himself a taxiplate so he can be chauffeured up bus lanes is not a man who considers himself to be a “regular” citizen in my book- and I fully acknowledge that he (like Zuckerberg) gives freely to charity on a regular basis.
Revenue believe he’s not using tricks. Unfortunately they’ll never declare this publicly, so unless you know someone who can confirm this, you’re taking my word on it. Sorry I can’t provide a link, but for what it’s worth, I believe it to be factual.
@Tommy, shut up will you? These big companies give us tons of employment. Look at IT industry, is booming here, not one problem in the recession. If these companies were not here, where would all those people have went, along with all their taxes(income, vat etc). In end of day he doesn’t have to give it away, at least he is doing something. What are you doing bar giving out?
So rashers you would compare poverty in Ireland to poverty in India ? Get real will you
Dara, your very interesting argument has swayed me. I will ponder this question some more.
Indeed, ‘Poverty-stricken economies like Ireland’s': Our 2014 GDP was higher than that of half of the States of the U.S. Cannot understand why people of this country are such terrible ambassadors for it. We’re damn lucky to live here.
Barry Flanagan, also there is employer national insurance contributions on top of this which is 13.8% which a company must pay on pay to employees
@Tom Kenny. what are you scuttering about? You said if the world’s wealth were divided equally we’d all have 10,000.00 each. I then remarked that the cost of living would be reduced. Where did I mention comparative poverty between Ireland, India or anywhere else?
Enough with the pithiness already.
That animal! How dare he give his money to people who actually need it! What’s the world coming to, god man liberals ;-(
He is donating the money to a new charity which he himself is setting up and is in control of. That is not giving his money to anyone but himself.
Peter, if he is making no income or gain from the new entity then how is he benefiting from it? If he is giving the money to other people while not receiving a penny from the new company then could you explain how he is managing to give the money to himself?
If a man wants to give away €42million to charity then I couldn’t give a shit what his motives are.
€42billion even!
What do people want? Do they want him to pay more tax or give more to charity? It’s a no brainer but you will always have someone giving out about anything.
I would rather my tax went to charity to be honest. What does it go to here? Keeping quangos alive?
For just 50 euros a week, you can feed two starving Irish water employees…
DonalC, I think I love you!! :-D
Seems like you’re damned if you do and damned if you don’t
Typical. There’s an enormous amount of money floating around earmarked for some of the neediest people who have the least in this world and invariably there’s a shower of sh*tes crying and whinging cos they aren’t getting any of it.
I’m not really a fan of Zuckerberg but if he want’s to donate 99% of the money he’s made to charities then he should be allowed do so. Who cares if a few privileged whingers aren’t getting a cut – given half the chance they’re the same people who’d rob the rest of blind if they could.
what’s the point of giving money to charity if you’re selling people out
its no secret that FB is fair game for the NSA
So what, no-one is forcing you to use Facebook, Mr fake Enda
It makes sense in what he is doing considering that he will have some control over where his money is going. Rather than some local politician getting funding for his local voter pool so as to get re-elected at least the money is going somewhere it is needed. Look at the waste of money on the Bertie Bowl and the Children’s Hospital which still hasn’t been built yet and it isn’t hard to see why a high net worth individual would prefer to bypass the parish pump politics and get the job done.
Take the children’s hospital for instance. Which is a better option, a billionaire paying their tax and still waiting for a hospital 10 or 15 years later or a billionaire consulting on the best option available, in the best place for it without some petty politician trying to secure it so as they an claim the credit and get re-elected and then going ahead with the project on time and on budget?
When you see a question mark in a news headline it generally means the story is clickbait rubbish.
Why doesn’t he pay his tax here and help the thousands of poor families living on the street and the sick who cannot access proper health service?
Anyway.
Nobody should have that amount of money.
It’s obscene.
Tommy, you do realise their are people around the world who are in much more need of help?Irish people, for the most part, have the opportunity to work, so they can provide for ourselves. A crazy concept I know, but one with proven results.
He earned it, it’s his. He created it so he can keep it. It’s not up to begrudgers like you to decide what he does with his own money. How about we take all your money off you?
How bout I don’t pay any tax then give a donation to my local Church every year.
I’ll go for that.
You will find the church has plenty of cash already
If you invent something that 1/5 of the people on earth use, you could be a billionaire too. Yay. And then you could hate yourself.
Tommy, if you can do it legally then go ahead. If you can’t then you’d be up the creek. Simple.
Sure, fair play to him, humanity is forever indebted to Mark for bestowing us with a platform sharing cheesy photos. (don’t know how we managed to get this far without him to be honest)
In Mark’s own words:
‘Dumb fcuks share their personal info with me’
Exactly, Tommy. Tell me, did he hold a gun to the head of any ‘Dumb fcuk”? Is anyone OBLIGED to use his shitty service! No? Barnum and Bailey said no-one got rich my underestimating public taste. I, myself, think Facebook is a boil on the arse of humanity – but that’s just me. Hundreds of millions disagree and, thus, Zuckerberg is rich beyond the dreams of avarice. Suck it up, Tommy, suck it up.
He doesn’t pay his taxes here because he doesn’t live here. A company of which he is a majority shareholder has an office here, and it pays its corporation tax.
Is your argument about us having a lower rate of corporation tax than other countries? (which is across the board for ALL companies)
If it is – maybe next time you’re in Aldi you should insist on paying Marks and Spencer prices when you get to the till, because, that’s essentially your stance.
whats’ the facebook?
a good deed met with skepticism… this is the age of the 21st century, a mechanical nightmare…
Pay your ducking taxes
Try being a regular business person and decide that your going to give the TAX money to anybody other that the TAX-MAN and see what happens, the IRISH STATE makes it VERY CLEAR who get that money and suffer you will if try anything else.
If you are a business person and you don’t pay tax then you are not a regular business person. You are a fradulant business person. Facebook operate within the laws.
He owns that charity, The U.S. is full of charities that only look after those who own then?
@ Michael Sands
look at that parasite Geldof
he can help Ethiopia but he cant rally celebrities to help Syria ?????
Anything with a celebrity in it seems to me as being self serving in my view…
So in a nutshell he doesnt trust any government to spend the money obtained through taxes… so he will give it directly to where he feels its needed… its bold … hope it works.. personally I think its right .. given the parasitic nature and financial wastage of government spending worldwide
So should everybody have the right to withdraw their taxes so they can give them to favoured charities? I get everybody’s skepticism about politics; but there is naivety in thinking that Zuckerberg is in the vanguard of a more sustainable method of wealth redistribution. Most billionaires like to remain as billionaires.
His $42 billion fortune means he is not personally concerned about tax.
Theoretically, if he put that money into a 1% deposit account in a Post Office (a VERY poor investment) he would earn $420 million a year in INTEREST.
That is more than $8 million a week in INTEREST at a poor 1% APR.
He is rich beyond the dreams of avarice.
Americans have an aversion to Royal Families(degenerates who squander the wealth of the original genius or give themselves airs-and-graces ……. as in the British Royal Family.)
Better to give it to a good cause NOW than to give it to an as-yet unborn thug.
FB is a waste of time same as alcohol or cigarettes
no wonder it is worth billions
Like
Revolting article. Really cynical writing.
Good article. Revolting jealous comments.
@ Ralph Hosford
i suppose your avatar is Blue White and Red because France never hurt a fly
they never murdered Syrian people (with air strikes)
they never murdered Algerian people
they never tested nukes in the Pacific
I’d rather the money go to charity then we get it and piss it down the drain feeding the rich mates of FG and fattening up the pay packets of useless quangos like Irish water along with over paid under worked managers in high paid state and semi state companies
Racist much?
What is wrong with avoiding taxes?
US inheritance tax has always been enormous so writing some of it off to charitable concerns protects the bulk of wealth to the families concerned. It’s basically a tax dodge and a somewhat worthy one too but still a tax dodge all the same.
Yes, he absolutely is trying to avoid tax. Rather than go into the national budget his money is going directly to good causes. This headline reads negatively and is another draw for the miserable haters out there who want something for nothing.
Never look a gift horse in the mouth. If he gave me a gift of 10,000 Euros tomorrow, I would have to pay tax on it. He is giving a huge fortune away, for whatever motive he has and, for that, we should be thankful. I bet he will find the most beneficial way to do this. Glad he is around and I happen to like Facebook. It’s great, as it keeps me in touch with people, some of whom have limited mobility. As far as I’m concerned, he is dead sound!
Christ the man is doing a great thing and probably sees what greed has done to this world so all the begrudgers mind there own business
Nice one mark but why tell the world about it?
Imagine If Zuckerberg didn’t have the Eureka moment to Create Facebook. There’d be no Facebook Cash pile to donate, no employees earning facebook salaries and paying taxes. For all the negativity that’s happened on Facebook let’s not forget at all the good that’s come from its existence.
Senior tax consultants with the top firms started life as government tax law makers, then they are headhunter into top firms to figure out how to help others avail of tax avoidance. Government ministers use these same people for personal advice. Taxes are for little people.
He plans to give away the shares? I planned on doing 100 situps this morning, had another coffee instead…will wait to be proved wrong
For heavens sake. He can’t do right for doing wrong. Lay off
He’d wanna save a bit! The shares are unrealized profits and he mightn’t have 45 billion to spend in a few years time when this IT bubble bursts.
I think its a brilliant idea, think of all the Charities he would help. Well done i say.
Chan a lucky woman eh.
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