According to documents filed with Companies House on Tuesday October 21, Facebook’s UK corporation tax bill came to a grand total of $4,005 in 2013. To give that statement even greater resonance, the income tax paid by a London school teacher is equal to over $4,430. Not only was the company’s corporation tax bill pitifully small, it actually had a credit balance of $230,414 due to tax credits from previous years.
Facebook Inc (NASDAQ FB) reported a pre-tax loss of $14.7 million in the UK last year, although its parent company, based in the U.S., filed a net profit of $1.5 billion. The loss of Facebook UK came from a turnover of $63.1 million, with a gross profit of $62.38 million.
You may be wondering how these figures add up to a loss, but that’s because we haven’t factored in the “administrative expenses” of $77.09 million, the majority of which due to stock-based payments to employees. Each of the 208 people employed by the company at the end of 2013 paid more personal tax than the company does.
Facebook Inc: Taxes
Facebook pays some of the top lawyers to advise them on how to minimize their tax bill. The Evening Standard cites a report from eMarketer which claims that Facebook Inc (NASDAQ FB) in fact raked in around $470 million in UK revenues last year, a 67% year-on-year rise from 2012. Most of this was passed through Ireland, where corporate tax rates are among the lowest in Europe.
Companies such as Facebook Inc (NASDAQ FB), Google Inc (NASDAQ GOOG) and Apple have come under increasing scrutiny for using accounting loopholes such as the “double-Irish” to shuttle money between various jurisdictions until the effective tax rate approaches zero.
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Facebook Inc (NASDAQ FB) Business News
Both national and European legislators have begun to focus more attention on the tax situation of large multinational companies, with the European Commission recently proposing an investigation into the dealings of Apple Inc (NASDAQ AAPL) and Amazon.com, Inc (NASDAQ AMZN), among others.
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