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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

#111

Post by arethuza »

TomGullen wrote: post #63
jkahn wrote: post #56

Earlier quoted context omitted.

You're not a fool, you're just not a multi-national with the ability to legally avoid/minimize tax.

Along the way we've been offered ways to get around this and that which we've politely declined. Most obvious one being put your HQ in some country you've never been to in your life, we'd save buckets. Also, if you get down to the metal with VAT there's a lot of ambiguity (opportunity). My experience is that scale is not a prerequisite for it being economically beneficial.

They didn't suggest "paying" yourself by loans from the offshore entity did they?

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

#112

Post by JupiterMoon »

rmc wrote: post #86
s_dev wrote: post #43

Earlier quoted context omitted.

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.

In general if we know about them (most people don't) we object to this just as much. NB the channel islands aren't strictly speaking a part of the UK.

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

#113

Post by dpatru »

In terms of providing social value, Facebook employees far surpass any government's employees. In just a few years Facebook has revolutionized how people connect with each other, whereas governments have, in general, barely been able to maintain the accomplishments of previous generations. This despite the fact that government generally force people to pay about one fifth of their labor, whereas Facebook offers its services for free. Governments should wither and die in favor of more socially beneficial organizations like Facebook.

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

#114

Post by SixSigma »

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…

You could call it "increased globalisation" but abusing transfer pricing was invented by the Vestey Brothers in the late 19th Century when they began importing beef from Argentina. They also invented the abuse of the offshore trust.

The legislative arms race that evolved was the UK tax office trying to tax the Vesteys, who went on to be one of the UK's wealthiest dynasties.

More info here: http://m.francisclark.co.uk/news-views/blog/the-vestey-broth...

Plus ça change, plus c'est la même chose

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

#115

Post by tobltobs »

raverbashing wrote: post #93
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, how much Apple money stays outside of the US because it was paid there? Also, how much VAT and other taxes are charged in an iPhone sold in Europe Same for Facebook, their ads generate VAT. Their employees there pay income tax.

First we were told to be nice to the rich and give them tax reduction, because we will be all happy for the trickling down pennies. And now we are supposed to give the cooperation tax relief because there is money trickling down from the employees?

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

#116

Post by tobltobs »

lsaferite wrote: post #106
raverbashing wrote: post #93

Earlier quoted context omitted.

Well, how much Apple money stays outside of the US because it was paid there? Also, how much VAT and other taxes are charged in an iPhone sold in Europe Same for Facebook, their ads generate VAT. Their employees there pay income tax.

As much as the minuscule corp tax bills infuriate me, my logical half laughs and says income tax is silly, just use sales tax. I know we'll never pass something along the lines of FairTax, but I daydream about it all the time. And yes, I've heard all the arguments against it and I still think it's a much better solution than taxing income.

A sale tax only system would be a nice gift for the wealthy.

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

#117

Post by mattmanser »

raverbashing wrote: post #93
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, how much Apple money stays outside of the US because it was paid there? Also, how much VAT and other taxes are charged in an iPhone sold in Europe Same for Facebook, their ads generate VAT. Their employees there pay income tax.

If I didn't buy an iPhone, I'd buy a different phone. The VAT would still be there. If I didn't use Facebook I'd be using a different image sharing service, or chat service, or whatever. The VAT would still be there.

Because I have a budget to spend on entertainment, and various companies compete for that budget.

We pay those taxes, Facebook/Apple doesn't 'generate' anything, that money would be spent on a different entertainment. We pay income taxes, if we didn't work for Facebook/Apple, we would have to find a different job, perhaps start our own company, etc.

I want to make this super clear. Those taxes, including income taxes, are our contributions, not Facebook's. The citizens are generating that money. If Facebook didn't exist, there would be a company filling that void with an alternative entertainment which VAT would still be charged on.

Now, on the flip-side, it's not entirely zero-sum and Facebook does increase the overall wealth. They are generating new markets, new growth, etc.

But is it by the percentage of money its extracting from the local economy? Of course not. And worse still, that money's sitting in an offshore account somewhere, not even flowing back into the US economy, because they're waiting for a tax break. So instead of doing what it's supposed to do, which is spur more growth, it's doing the worst thing it can, which is being excluded from the world economy.

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

#118

Post by ghiculescu »

JupiterMoon wrote: post #107
pja wrote: post #20

So they paid next to no corporation tax. Meanwhile their employees will have paid a stack of income tax & the new rules on VAT should mean that all Facebook Ad sales to UK customers are subject to UK VAT. I don’t think the UK is being shortchanged all that much. When Google/FB et al were able to shift Ad sales to low-VAT regime holding companies, that was definitely taking the piss. This? Meh.

This argument is not valid. Yes they are paying VAT and income tax. So what? They should also be paying corporation tax. A start up competitor would have to pay VAT, income tax and corporation tax.

Not if that competitor made a loss the way facebook has here.

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

#119

Post by lsaferite »

vidarh wrote: post #30
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…

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.

The FairTax proposal in the US addressed this with a "prebate" that was mailed out to every person (not sure the criteria) at the beginning of the year. This was a check that covered the taxes on base (poverty?) level spending. This was meant to remove the regressive taxation effect.

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

#120

Post by TomGullen »

arethuza wrote: post #111
TomGullen wrote: post #63

Earlier quoted context omitted.

Along the way we've been offered ways to get around this and that which we've politely declined. Most obvious one being put your HQ in some country you've never been to in your life, we'd save buckets. Also, if you get down to the metal with VAT there's a lot of ambiguity (opportunity). My experience is that scale is not a prerequisite for it being economically beneficial.

They didn't suggest "paying" yourself by loans from the offshore entity did they?

I don't believe so.
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