Global corporates and taxation – a discussion worth having


Facebook ‘refused to listen to the voice’ of the British public by channelling profits through Ireland to avoid the taxman in the UK, an MP said last night.

The move by the social network meant it paid just £1.8million in Irish tax on more than £2.3billion of global sales, but none in Britain.  

The accusation came as details of the social network’s efforts to avoid paying UK tax emerged, just days after Chancellor George Osborne announced a crackdown on multinational companies using ‘elaborate structures’ to avoid paying up.

Around 46 per cent (£2.35billion) of Facebook’s global sales where channelled through Ireland – allowing the company to make profits of £2.3billion.

Its tax bill was reduced further by paying £2.29billion in ‘administrative expenses’ to Facebook’s parent company, The Guardian reported.

Shifting the money meant Mark Zuckerberg’s company only paid the equivalent of £1.81million in Irish tax on taxable profits of £5.76million.

By channelling its UK sales through Ireland, Facebook has avoided paying any tax in Britain for two years running – despite 33 million Brits having accounts.

It is a tricky problem.  On the one hand, there is nothing wrong with companies reducing their tax liabilities using legal means.  On the other hand, the numbers involved with companies like Facebook and Google are staggering.

For Facebook to organise its affairs so it only makes a five million pound profit from approximately 1.2 billion pounds in sales seems intuitively wrong.

We have simply assumed that if, for example, Facebook doesn’t pay taxes in New Zealand for the business it does with New Zealanders, they will pay these taxes elsewhere.   But that’s not really the case – they pay very few taxes.  In practical terms, we have companies with billions of sales world-wide getting away with paying next to no tax at all.

The answer may lie with a kind of transaction levy.   The country where the consumer lives gets to clip the ticket as the sale is made.

The purists will howl in outrage, but the problem needs addressing:  how do we set up rules that ensure global corporates shoulder the same burden as your local panel beater, or in fact, you.

– Daily Mail

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As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story. When he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet. Cam Slater doesn’t do quiet and, as a result, he is a polarising, controversial but highly effective journalist who takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him, you can’t ignore him.