Newspaper article International New York Times

Facebook Agrees to Pay Higher Taxes in Britain ; Firm Will No Longer Book British Sales in Ireland, Where the Levy Is Lower

Newspaper article International New York Times

Facebook Agrees to Pay Higher Taxes in Britain ; Firm Will No Longer Book British Sales in Ireland, Where the Levy Is Lower

Article excerpt

The company will report sales linked to its British operations, mostly digital advertising, through its local subsidiary, instead of through its Irish unit.

Facebook moved to change its relationship status with the British tax authorities on Friday.

The company announced that it would soon alter how it paid tax in Britain, potentially leading to the company's paying millions of dollars more on its operations in the country.

The move comes amid growing anger across Europe about American technology giants' aggressive accounting practices.

Google is facing its own issues over tax across the 28-member bloc, as French and Italian authorities investigate, while Apple, whose international operations are run from low-tax Ireland, is at the center of a lengthy inquiry by the European Commission, the executive arm of the European Union, about whether it received a preferential -- and potentially illegal -- tax deal from the Irish authorities. Apple and the Irish government deny any wrongdoing.

As part of Facebook's new tax structure, the company said it would report sales linked to its British operations, primarily from digital advertising, through its local subsidiary, instead of booking its British revenues through its Irish unit. Facebook's international headquarters are in Dublin.

The new structure will take effect in early April, according to the company.

"U.K. sales made directly by our U.K. team will be booked in the U.K., not Ireland," Lena Pietsch, a Facebook spokeswoman, said in a statement on Friday. "Facebook U.K. will then record the revenue from these sales."

While Facebook did not disclose how much more British tax it would now pay, it is likely the company will pay significantly more than what it currently does on its operations in Britain.

In 2014, the latest year for which records are available, Facebook paid a mere $6,100 in British corporation tax, or slightly less than what the average British worker paid in income tax. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.