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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

#181

Post by david_mitchell »

The basic problem here is that business is now global whereas taxation is still at the nation state level. Countries have to compete for business and smaller states with limited resources can bring in money by becomming tax havens. I don't really know of any solution to this.

I think it's worth pointing out that even from the perspective of most businesses this situation sucks. Smaller companies or startups lack the resources to benefit from tax avoidance schemes so are at a disadvantage to their larger competitors.

And if you do start a company that is growing large you don't really have much choice but to start doing it too. You won't be able to compete if you are paying 20% and the competition is paying 2%. You have to do it because everyone else is doing it.

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

#182

Post by the_mitsuhiko »

mootothemax wrote: post #179
marrs wrote: post #171

Earlier quoted context omitted.

Why should Facebook get to enjoy an advantage over 36 companies employing 10 people each at a similar average salary? Let's turn it around. How would you go about taxing a corporation that didn't make much profit last year

>Let's turn it around. How would you go about taxing a corporation that didn't make much profit last year From the article: "[T]he firm also paid its 362 UK staff a total of £35.4m in share bonuses." That says to me that it'd be worth trying to figure out how to reconcile that against "a pre-tax loss of £28.5m."

So you should not be entitled to bonuses when you work in the UK office because the UK office does not have enough revenue to make up for the cost of the workforce, but the same people in the SFO office should?

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

#183

Post by mrweasel »

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…

>As the company chooses their own costs and license fees, they can effectively control in which entity they make a profit and which they don't.

I've only seen one really effective way around that suggested, but it's not without it's drawbacks. If a country taxes each sale of a service or product, then it's no longer possible to funnel money out of the country. It effectively eliminates companies that operate in a country for years with a fake lose.

The drawback is that it will potentially cost jobs and close business that could be profitable in the long term.

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

#184

Post by linkydinkandyou »

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…

> as honestly as possible

Nobody has suggested that Facebook is violating tax law are they?

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

#185

Post by 1stop »

refurb wrote: post #169
snorrah wrote: post #73

Shameful. Just shameful. I don't care how it gets sugar coated, if you claim to be working for the good of humanity (in facebooks case by connecting people together) and then you loophole yourself out of paying taxes, you are morally bankrupt.

Why do people get mad at the company for not paying more in taxes? I presume they are following the law and paying what is required? Why not get mad at the politicians who created the tax code?

... Is this like a "Why do people get mad you have to sit at the back of the bus, it is the law after all?" kind of argument?

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

#186

Post by mootothemax »

marrs wrote: post #144
notahacker wrote: post #94

Earlier quoted context omitted.

I don't think it's advocacy of "aggressive taxation policies" to argue that the corporation tax bill for a profitable multinational earning millions in UK revenue ought to be higher than the income tax bill for an individual person on the UK average wage. YMMV. How many of Facebook's 362 UK staff would be unemployed for any significant period if they relocated to Dublin? How many would instead be adding value to a co…

I don't understand what you're arguing for. If Facebook shut down UK operations then, for starters, Facebook would be paying no tax at all in the UK and Ireland would gain the difference. If the Facebook UK staff relocated to Dublin then the loss to the UK economy would be exponentially worse.

>If the Facebook UK staff relocated to Dublin then the loss to the UK economy would be exponentially worse.

Can anyone say that for certain?

How do you know, for example, that the same staff they'd employ wouldn't end up working for a company that does pay a large amount of corporation tax, leaving the UK's tax coffers substantially better off than they'd be otherwise?

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

#187

Post by switch007 »

marrs wrote: post #152
100timesthis wrote: post #95

Earlier quoted context omitted.

maybe stupid question: do you expect a lot of fake contractors or there is another way? Because if they are contractors they wouldn't be part of those 362 in staff right?

I think the parent is referring to contractors, who avoid PAYE but still have to pay dividend and corporation tax. The dividend tax rate is about to go up so the PAYE issue is about to become void.

Sorry, I was more thinking of the executives, whose large salaries would skew the average, and would have a complicated compensation package, and can afford accountants to do creative accounting. I do not know if there are executives included in that 362 employee figure.

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

#188

Post by mootothemax »

the_mitsuhiko wrote: post #182
mootothemax wrote: post #179

Earlier quoted context omitted.

>Let's turn it around. How would you go about taxing a corporation that didn't make much profit last year From the article: "[T]he firm also paid its 362 UK staff a total of £35.4m in share bonuses." That says to me that it'd be worth trying to figure out how to reconcile that against "a pre-tax loss of £28.5m."

So you should not be entitled to bonuses when you work in the UK office because the UK office does not have enough revenue to make up for the cost of the workforce, but the same people in the SFO office should?

>So you should not be entitled to bonuses when you work in the UK office because the UK office does not have enough revenue to make up for the cost of the workforce, but the same people in the SFO office should?

1. I didn't say that.

2. What's to stop the SFO office issuing the bonuses?

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

#189

Post by 3pt14159 »

BenoitEssiambre wrote: post #140
stegosaurus wrote: post #68

Re-posting my comment from the Guardian thread that came up earlier ( https://news.ycombinator.com/item?id=10371728 ) Corporation tax in the UK is payable on 'profits subject to corporation tax'. In laymen's terms this is roughly equivalent to to accounting profit. Employee salaries, bonuses, etc are generally deductible; if you pay me 50K, that's 50K out of your bottom line. The employees in question likely pay a va…

Exactly, it makes little economic sense to tax corporations. It makes much more sense to tax the people who own corporations when they take the money out of them. Though there might be some practical reasons to tax corporations a bit. It might be easier to prevent tax evasion when you take the money at the source and it might lessen the amount of personal purchases being passed as business expenses to avoid taxes.

The problem with this is that the shareholders may be outside your country. It is pointer management. You can't trace it down 100% of the time. If you want an easier tax policy focusing on things that can't be hidden like land, highway use, pollution, etc is much easier.

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

#190

Post by the_mitsuhiko »

mootothemax wrote: post #188
the_mitsuhiko wrote: post #182

Earlier quoted context omitted.

So you should not be entitled to bonuses when you work in the UK office because the UK office does not have enough revenue to make up for the cost of the workforce, but the same people in the SFO office should?

>So you should not be entitled to bonuses when you work in the UK office because the UK office does not have enough revenue to make up for the cost of the workforce, but the same people in the SFO office should? 1. I didn't say that. 2. What's to stop the SFO office issuing the bonuses?

> 2. What's to stop the SFO office issuing the bonuses?

That's basically what is happening? The company made a loss, so that money came from somewhere else to pay for it.

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