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Facebook pays just £4,327 corporation tax in 2014.
Comments
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undercover_peon wrote: »I don't see any problem with the way this was reported. It IS newsworthy to know that for these massive companies a lot of taxes are largely optional. Clearly basing taxation on turnover isn't acceptable as you could have a large turnover but make no profit but equally companies like Facebook, Amazon and Goggle are extracting the urine somewhat.
no, we need the rule of law : we don't need a Putin like star chamber
if the law is wrong then change it
what criteria do you have for deciding the 'right ' level of taxation other than the UK law?0 -
How can dividends or bonuses not be from profit?
If the company does pay them and deliberately makes itself a loss, then it should be struck off.0 -
How can dividends or bonuses not be from profit?
If the company does pay them and deliberately makes itself a loss, then it should be struck off.
Bonuses can be paid regardless of whether a company makes a profit and indeed is part of the costs of a company so is paid before the calculation of gross profits.
Struck off what?0 -
Bonuses can be paid regardless of whether a company makes a profit and indeed is part of the costs of a company so is paid before the calculation of gross profits.
Struck off what?
"Struck off" as in removed from the Companies Register; the terminology "struck off" is used at https://www.gov.uk/strike-off-your-company-from-companies-register, though that particular example refers to a voluntary action.0 -
Sure, but you could argue that the bonuses are a construct to make the company non-profitable.
"Struck off" as in removed from the Companies Register; the terminology "struck off" is used at https://www.gov.uk/strike-off-your-company-from-companies-register, though that particular example refers to a voluntary action.
Bonuses are normally a means of remunerating staff. I get an annual bonus (or not) each year based on various performance metrics and have done pretty much everywhere I've worked since I left uni. Nothing to do with dodging tax. I always pay income taxes/NI/Social Security Taxes in full on my bonus in exactly the same way as I do my normal salary depending on the local rules in the country I am resident in at the time.
Facebook should pay more tax but the reason that they don't pay more is nothing to do with Facebook. Facebook's directors are under a legal obligation to minimise their tax bill: their fiduciary duty is to shareholders not to taxpayers. In theory they can go to prison for overpaying tax.0 -
How can dividends or bonuses not be from profit?...
Dividends can only be paid out of distributable profits. The payment of dividends has no bearing on a company's declared or taxable profits.
Curiously enough the kind of share bonuses paid by Facebook UK are not an allowable expense for tax purposes. Which explains why Facebook UK made an accounting loss of £28.5m, yet was still liable for CT...If the company does pay them and deliberately makes itself a loss, then it should be struck off.
That's the Guardian f***** then. It's been 'deliberately' making losses since time immemorial.:)0 -
Bonuses are normally a means of remunerating staff. I get an annual bonus (or not) each year based on various performance metrics and have done pretty much everywhere I've worked since I left uni. Nothing to do with dodging tax. I always pay income taxes/NI/Social Security Taxes in full on my bonus in exactly the same way as I do my normal salary depending on the local rules in the country I am resident in at the time.
Facebook should pay more tax but the reason that they don't pay more is nothing to do with Facebook. Facebook's directors are under a legal obligation to minimise their tax bill: their fiduciary duty is to shareholders not to taxpayers. In theory they can go to prison for overpaying tax.
However, if it is processing large amounts of money and deliberately hoicking the profits elsewhere (eg. in cross-departmental charging, or whatever), then that is a construct to avoid taxes.
Of course, it could be that FB UK indeed doesn't make any money, and is instead subsidised from the head operation.0 -
Yes, yes, I understand that the aim of the company is to do the best for itself, and if the "best" it can do for its shareholders is to run at a loss and not issue dividends, then so be it.
However, if it is processing large amounts of money and deliberately hoicking the profits elsewhere (eg. in cross-departmental charging, or whatever), then that is a construct to avoid taxes.
Of course, it could be that FB UK indeed doesn't make any money, and is instead subsidised from the head operation.
There is no however.
Facebook, as with most US based companies, is incorporated in Delaware which means its board of directors is regulated under Delaware law. Wikipedia sums it up pretty well I think:
https://en.wikipedia.org/wiki/Business_judgment_rule#Rationale
The point is that deliberately overpaying taxes is a misappropriation of company funds that is an illegal act. Of course proving that is a different matter but the board of Facebook are required to act in the best interests of the shareholders of Facebook, not set up their tax affairs in such a way as to pay a level of Corporation Tax that someone else considers to be 'fair'.
I'm not arguing that the rules are right, they're not. However we can't blame Facebook for that.0 -
How can dividends or bonuses not be from profit?
If the company does pay them and deliberately makes itself a loss, then it should be struck off.Sure, but you could argue that the bonuses are a construct to make the company non-profitable.
"Struck off" as in removed from the Companies Register; the terminology "struck off" is used at https://www.gov.uk/strike-off-your-company-from-companies-register, though that particular example refers to a voluntary action.
So you are saying you would rather a company pay corporation tax at 20% than PAYE taxes on a bonus of around 60%...
and dividends are out of taxed profits...0 -
martinsurrey wrote: »and dividends are out of taxed profits...
Well quite, as "any fule kno".
Those most critical of the tax system seem to be (as ever) those who know the least about it.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0
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