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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]
Image credit: Taxes from Shutterstock
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I no its not a morale thing to do but you cant really blame them. If i was given the opportunity to pay less tax which was legal i’d do it, its a loophole the government needs to sort out.
Exactly. People should be getting angry at the Government rather than the Companies.
I don’t feel angry at Facebook/Vodafone/whoever for legally avoiding the tax (kudos in fact), but the authorities that allow these loopholes are complete twats. National and international laws need to be effective and watertight to prevent these shenanigans….
Wish I was an average UK Facebook employee (even if I do hate the product!).
This is neither moral or in the best interests of the company. PR can be a good thing or a bad thing, but like Vodafone gaining a reputation for tax dodging it can backfire.
While things like this may be legs, and should be closed, we can do things to mitigate the damage. I want the Gov to ensure it passes no business, does not listen to nor support to companies who dodge taxes. In some cases I wouldn’t mind them being barred from trading, the market will replace them and it really is unfair competition when they are competing with UK tax paying companies.
At some point in the further Facebook will demand faster internet, a change in the law or something similar. They should be told to go ask Ireland.