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Facebook paid £4,327 corporation tax in the UK in 2014

bbc.co.uk

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Re: Facebook paid £4,327 corporation tax in the UK in 2014

#81

Post by jkahn »

exDM69 wrote: post #77
jkahn wrote: post #12

Global companies offshoring profits and not paying enough tax (in the eyes of many countries) was a hot topic at the last G20 summit in Brisbane. This isn't limited to Facebook, as the article explains. The issue and background here is that when large companies operate globally, each country has its own local subsidiary, owned by the global entity. Money is made in each country by selling goods or services. How are t…

Apple is a particularly difficult case, because they control every link in the chain of supply from manufacturing to retail and pay less than 1% effective corporate tax from their profits. From every step of the supply chain. It is very difficult, if not impossible, to compete with Apple without having a similar end-to-end control of manufacturing to retail. If a company has to purchase their products from a manufact…

It's certainly not a level playing field when competing against a multinational like Apple. It's also hard for countries to enforce competition rules (e.g. Anti-dumping)..

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#82

Post by TomGullen »

SmellyGeekBoy wrote: post #79
TomGullen wrote: post #17

TIL we pay 10-20x more corp tax than Facebook. Sometimes I feel like a fool, but we've always said from day 1 try to do things as honestly as possible which I'm quite proud of, but there really doesn't seem to be much practical upside apart from not being outed and shamed. First world problem I guess, at least we're turning a profit. It is starting to make me a bit bitter though. For example, we've spent a LOT of tim…

I'm a one-man-band and I paid about double the corporation tax Facebook did in 2014. My turnover isn't even high enough to register for VAT. Really makes you think!

Just FYI, when you do need to register for VAT make sure you check out the benefits of Flat VAT, for us it was significantly more economical then regular VAT registration.

I'm constantly surprised how many accountants don't seem to even make their clients aware of this option.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#84

Post by TomGullen »

kybernetyk wrote: post #24
kauffj wrote: post #13

Earlier quoted context omitted.

I'm a citizen and I think that. Perhaps you describe most citizens, but certainly not all.

I run my own business here in Germany and I'm all for getting every penny out of every tax loophole possible. But then in my peer group I'm the only one who thinks that way. Most people would rather want everyone else to be as highly taxed as themselves than lower taxes overall it seems.

> I run my own business here in Germany and I'm all for getting every penny out of every tax loophole possible.

I feel that's a sad attitude when you're making every effort possible to contribute as little as possible.

At least you're honest about it, it feels like a prevalent attitude.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#85

Post by jkahn »

krotton wrote: post #70
jkahn wrote: post #12

Global companies offshoring profits and not paying enough tax (in the eyes of many countries) was a hot topic at the last G20 summit in Brisbane. This isn't limited to Facebook, as the article explains. The issue and background here is that when large companies operate globally, each country has its own local subsidiary, owned by the global entity. Money is made in each country by selling goods or services. How are t…

Well, in hypothetical laissez-faire capitalism taxes would not be needed to provide infrastructure - Uber would just have to pay its fees for driving on private roads (etc.). This would drive prices up, but fairly divide the costs between the roads' users. Although I must admit I have no idea how things could look with purely digital companies like Facebook. I can think of local ISP-s charging the company for allowin…

That's theoretical, whereas government and corporations deal with realities.

100% capitalism isn't practical and is unfair (e.g, to the poor and sick). What is a fair way to divide costs for road usage: time of use, miles driven, emissions, cost of vehicle, ability to pay? It's not an easy answer, and many are practically unenforceable. Hence, tax.

And for the record: I'm generally capitalist by economic viewpoint.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#86

Post by rmc »

s_dev wrote: post #43
mrkmcknz wrote: post #18

The UK press seems to have a field day when it comes to multi-national corporations not paying corporation tax. We will no doubt shortly have a number of MPs telling us how unacceptable this is and that Facebook need to start paying up. This all irks me a little. 362 Facebook staff on an average salary of say £65,000 will contribute at least £7,230,696.60 in taxes and NI to HMRC. Let's also not pretend that £65,000 i…

Do you think they'd pay more or less tax in Dublin compared to £5k? Irelands 12.5% seems very reasonable considering its so close to its effective rate. France, Britain and Germany all allow massive write offs and loop holes that mean their effective rate is multiples lower than their stated corporate tax rate and this story will be forgotten by the Brits, Germans and French who'll turn around and repeat their condem…

It's always funny when Brits complain about foreign tax havens. The UK is a massive tax haven, with oodles of little overseas territories, or Isle of Man, or the Channel Islands.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#87

Post by rmc »

kuyfiuyg wrote: post #19

I'm asking someone who is more knowledgeable than me on this topic. What would happen if you replace all (most) tax with VAT? That would mean everywhere there is a real transaction, that generates greater value, that is where the tax is. It would also make it impossible for big companies to do tax evasion - since you limit the effects to the 'leaves' of the tree that is the economic system, you can catch the money be…

> What would happen if you replace all (most) tax with VAT?

The poor would pay considerably more of their income as tax than the rich.

And yes, there are ways to do tax evasion with VAT. There was a court case in the UK about whether Jaffa Cakes were a cake or a biscuit (because there are different VAT categories)

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#88

Post by Cakez0r »

amirmc wrote: post #57
DanBC wrote: post #4

No-one expects companies to pay the full whack of tax. But Facebook is taking the piss. They need to be a bit careful, because they risk causing much tighter tax regulation in EU. Citizens don't see this behaviour and think "well done, got one over on the government". Most citizens are infuriated by this scumbag behaviour. And before anyone says "they're just obeying the law" -- we don't know that. They're clearly no…

> "No-one expects companies to pay the full whack of tax." Why? I don't understand why this is considered acceptable. I'm expected to pay the full whack of tax (income, VAT, etc), but somehow it's taken as given that corporations will pay 'less than they're supposed to'. How can we fix anything if this is the prevailing attitude?

In this case, Facebook did pay the full whack of tax. The article implies they avoided paying corporation tax by paying out large bonuses, causing them to have been operating at a loss (on paper). If that is the case, then I don't think that's such a bad thing. All of their employees will still pay tax on their bonuses, so it's not like the tax payer is being completely robbed. At least their workers are getting a cut of the profit, rather than having it all go to Facebook's coffers and the government (in the form of corporation tax).

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#89

Post by rmc »

lagadu wrote: post #66
vidarh wrote: post #30

Earlier quoted context omitted.

The issue with VAT is that as usually applied it is an extremely regressive tax. Poorer people spend a far higher proportion on their income on purchases that have VAT applied. If more categories of basic goods were zero-rated or exempt, or if other mechanisms were used to make the VAT burden less regressive, then it might be viable.

That's how most of Europe does VAT: food, cultural and other essential products enjoy a very reduced VAT rate in many (but not all) countries here[1]. [1] https://en.wikipedia.org/wiki/Value-added_tax#Tax_rates

There can still be VAT for things poor people buy. Is there chocolate on your biscuit? Then it's "luxury" and you have to pay VAT.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#90

Post by rmc »

elicox wrote: post #58

I don't know if is the case of Facebook, but in general this is the story of most of tech companies, all are located in Ireland where they pay so much less taxes, and in rest of EU countries all this big companies pay this quantities or in the worse case the government return money. EU is totally broken, one market with one tax per country; Obviously, all companies go to the country with less taxes. And the different…

> all are located in Ireland where they pay so much less taxes

Another reason for Ireland was that there was a very lax view of European Data Protection law there.

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