Facebook is now ranked alongside Vodafone in the list of shame when it comes to tax avoidance, with the social network accused of shovelling most of its UK earnings through Ireland in order to pay lower corporation tax rates.
The dodge isn’t exactly illegal, with plenty of companies including the mighty Apple, said to be using favourable Irish tax rates to offset their enormous UK income. Incredibly, figures show that Facebook paid the UK government just £195,890 in taxes last year, a number made all the more shameful by the fact that the average UK Facebook employee earns a whopping great £275,000.
The low tax rate is based around a paltry declared UK income of only £20m, with the rest of the network’s income, which analysts claim could be as high as £175m, channelled through its Dublin offices simply to avoid paying the UK’s higher corporation tax rate.
Again, it’s not an illegal activity, it’s just the kind of amazing tax dodge you can get away with when you can afford to pay the best accountants in the country to save you tens of millions. [Guardian]
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