U.K. Leaders Take Aim at Facebook’s Tax Bill

The chair of the U.K. Parliament’s Public Accounts Committee, Margaret Hodge, had some harsh words for Facebook over its low tax bill and its method of legally avoiding taxation by channeling its revenues through Ireland, home of its European headquarters.

ExaminingTaxes650The chair of the U.K. Parliament’s Public Accounts Committee, Margaret Hodge, had some harsh words for Facebook over its low tax bill and its method of legally avoiding taxation by channeling its revenues through Ireland, home of its European headquarters.

The Guardian reported that Facebook reported nearly 3 billion euros ($3.69 billion) in advertising sales in Europe, yet it paid just €2.3 million ($2.83 million) in tax, adding that the company channeled €2.9 billion ($3.56 billion) of its global revenues through Ireland, as well as paying out another €2.9 billion ($3.56 billion) in “administrative expenses,” most of which were royalty payments to the parent company.

Hodge said, as reported by The Guardian:

(Facebook appears to be) using elaborate corporate structures and artificial devices for no purpose other than to avoid tax.

It is clear from opinion polls that the overwhelming majority of British people do not regard this as morally acceptable. We have to take tough action to crack down on this behavior, and the U.K. should be leading the way on this issue, as well as participating in the multilateral process that is going on through the OECD (Organisation for Economic Co-operation and Development) and G20.

It seems that Facebook — like Starbucks, which this week admitted that it will pay no corporation tax in the U.K. for the next three years — is still refusing to listen to the voice of public opinion.

Earlier this week, U.K. Chancellor George Osborne said in his autumn statement, as reported by The Guardian:

Some of the largest companies in the world, including those in the tech sector, use elaborate structures to avoid paying taxes. That’s not fair to other British firms. It’s not fair to British people, either. Today we’re putting a stop to it. My message is consistent and clear: low taxes, but low taxes that will be paid.

Readers: Is Facebook U.K. tax party about to end?

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