Facebook May Pay More in Tax in EuropeAdded: Thursday, March 10th, 2016
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The tech giant could pay millions of pounds in British tax if it approves fundamental changes to its corporate structure in the region. Starting next month, Facebook will change its policy in such a way that revenue derived from its major advertisers displaying content on the social network will be routed through the United Kingdom rather than Ireland, as it is currently done. This will generate higher taxable profits in the UK and help Facebook mitigate criticism of tax avoidance.
Facebook faced criticism after revealing that it paid very little corporation tax in 2014, despite the high salary of its UK staff. Now the company announced that major British customers would be soon notified about receiving invoices from Facebook UK and not Facebook Ireland in the future. Facebook also said that the move had been planned in advance. Its largest advertising customers in the country include Tesco and Sainsbury. It is known that smaller businesses using Facebook’s online ad-buying instruments will still be invoiced through Facebook Ireland.
Facebook confirmed that the majority of its marketers used its self-service ad platform in order to launch and manage their advertising campaigns. In the meantime, Facebook has over 35 sales offices all over the world, including the United Kingdom, while it also works with traditional advertising agencies. If it changes its policy, Facebook UK branch will generate significantly higher revenues and therefore pay a higher level of corporation tax.
According to statistics, the United Kingdom represents less than 1/10 of the company’s global revenue, but Facebook claimed that its operations in the UK, which include more than 850 employees, remained an important part of the business. For example, it is known that Facebook is currently building a new headquarters in London, and the country also contributes to some of its most ambitious projects.
The company didn’t disclose the sum of its ad revenue that would now be invoiced through the UK. An investigation of the Public Accounts Committee into Google’s similar ad-sales arrangements found out that only 1% of its ads were sold offline, but accounted for about 60% of Facebook’s revenue in Britain. Facebook currently has about 1.6 billion monthly active users, 32 million of which are in the UK.
Thursday, March 10th, 2016
|Well only paying £4000 in tax when they make millions in ads is abit of a joke.. never hear of anyone trying to rip America off someone goes straight to jail.||
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