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Facebook pays just £4,327 corporation tax in 2014.
Comments
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Correct, and is anybody on this thread disputing that it is highly suspicious that the "licencing" fees seem to have by some uncanny coincidence worked out to be such that the company, despite all of its employees meeting/exceeding their targets to achieve their bonuses, barely makes a profit?
Indeed. It's not like this is some kind of secret. The process, for anyone that is interested, is known as the double Irish Dutch sandwich.
http://www.investopedia.com/terms/d/double-irish-with-a-dutch-sandwich.asp
If we want Facebook to pay more tax, which is basically a tax on videos of cute kittens which seems a bit wrong, then we need to ask the Dutch and Irish very nicely if they'd change their tax laws.0 -
Indeed. It's not like this is some kind of secret. The process, for anyone that is interested, is known as the double Irish Dutch sandwich.
http://www.investopedia.com/terms/d/double-irish-with-a-dutch-sandwich.asp
If we want Facebook to pay more tax, which is basically a tax on videos of cute kittens which seems a bit wrong, then we need to ask the Dutch and Irish very nicely if they'd change their tax laws.
and the Americans, its the remittance basis of American taxation that allows this. Facebook inc (the american parent) only gets taxed by America on its profits when it remits those profits to the US, so by keeping them in the second Irish company, they don't actually pay any american tax either.
None of the people who are against this kind of thing have answered my numerical question on Bentley, maybe because its not possible to give both a fair answer and one that follows their thought that multinationals are bad and should pay more tax...0 -
Correct, and is anybody on this thread disputing that it is highly suspicious that the "licencing" fees seem to have by some uncanny coincidence worked out to be such that the company, despite all of its employees meeting/exceeding their targets to achieve their bonuses, barely makes a profit?
What licensing fees? What is it you think you know about Facebook UK's operations?0 -
martinsurrey wrote: »and the Americans, its the remittance basis of American taxation that allows this.....
Most jurisdiction use the"remittance basis" in that sense. We certainly do.martinsurrey wrote: »... Facebook inc (the american parent) only gets taxed by America on its profits when it remits those profits to the US, so by keeping them in the second Irish company, they don't actually pay any american tax either.....
Facebook UK Ltd is owned by Facebook Global Holdings II LLC which is a company registered in the USA. Thus any profits made by Facebook UK Ltd would be remitted directly to the USA.0 -
Most jurisdiction use the"remittance basis" in that sense. We certainly do.
Facebook UK Ltd is owned by Facebook Global Holdings II LLC which is a company registered in the USA. Thus any profits made by Facebook UK Ltd would be remitted directly to the USA.
Are you sure? there is nothing forcing the UK company to pay a dividend (and trigger the US tax), it can hold it indefinitely for corporate acquisitions or for re investment.
and Facebook UK is not set up as a profit centre, all of its sales are generated from transfer pricing to other Facebook entities (no external sales).
http://www.taxresearch.org.uk/Blog/2015/10/13/whats-wrong-with-facebook-uks-accounts-and-what-reforms-are-now-needed/
there is a link which has extracts from the accounts
The corporate entities that invoice for the actual external sales for facebook are all based outside the UK, and keep their cash off shore of the US.
https://www.americanprogress.org/issues/general/news/2011/03/16/9215/tax-expenditure-of-the-week-offshore-tax-deferral/
there is a good guide on US deferral.0 -
martinsurrey wrote: »Are you sure? there is nothing forcing the UK company to pay a dividend (and trigger the US tax), it can hold it indefinitely for corporate acquisitions or for re investment.......
I'm 100% sure that it is a subdidiary of Facebook Global Holdings II LLC because that's what it says on its annual return and the filed accounts.martinsurrey wrote: »...and Facebook UK is not set up as a profit centre, all of its sales are generated from transfer pricing to other Facebook entities (no external sales)....
Correct. I have actually seen the accounts. (It's not only Mr Murphy that can access the CH beta service.:)) Facebook UK "provides sales support, marketing services, and engineering support to the Facebook Group", i.e. it's purely a service centre, and derives 100% of its income from other Facebook Group entities....martinsurrey wrote: »...The corporate entities that invoice for the actual external sales for facebook are all based outside the UK, and keep their cash off shore of the US.
... but unfortunately because of FRS8, Facebook UK doesn't have to tell any which entities, and so it doesn't. But from the point of view of UK taxation, it would not matter anyway, unless they happened to be in the UK.0 -
PS. Interested parties can try this link
https://beta.companieshouse.gov.uk/company/06331310/filing-history0 -
I'm 100% sure that it is a subdidiary of Facebook Global Holdings II LLC because that's what it says on its annual return and the filed accounts.
Thats not what I meant by are you sure, this was the bit
"Thus any profits made by Facebook UK Ltd would be remitted directly to the USA"
a profit, does not ever need to be remitted.
btw you clearly know what you're talking about and I don't want to argue about minor points :-)0 -
martinsurrey wrote: »Thats not what I meant by are you sure, this was the bit
"Thus any profits made by Facebook UK Ltd would be remitted directly to the USA"
a profit, does not ever need to be remitted.
btw you clearly know what you're talking about and I don't want to argue about minor points :-)
Oh I see. No, profits do not have to be remitted; companies have the choice whether or not to pay a dividend. But, if Facebook UK ever made any profits and decided to pay a dividend it would be remitted directly to the USA.0 -
Oh I see. No, profits do not have to be remitted; companies have the choice whether or not to pay a dividend. But, if Facebook UK ever made any profits and decided to pay a dividend it would be remitted directly to the USA.
only sufficient funds to pay the dividend need to be remitted to the US : the rest could stay overseas and so taxed at low rates0
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