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Facebook accused of tax evasion

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Facebook tax evasion questions

Facebook are being asked stern questions about their tax activities, after the announced profits for 2011 were called into doubt. The social media website reported UK revenues of £20.4m, a huge contrast to the £175m that media analysts Enders estimate the firm made in Britain last year.

Richard Murphy, of Tax Research UK was extremely critical of the company, saying: “The UK is being taken for a ride. Facebook is taking standard practice for these IT companies to a new high, or low, depending on how you look at it. The UK is giving the tax break and the Irish get benefit of all the tax on the sales.” Mr Murphy went on to say that it appeared only around 11 per cent of total sales were being declared in Britain.

The lower tax rates offered to companies in Ireland appears to be the main factor for the company basing their headquarters there. When questioned on this, Facebook told the Guardian: “We have our international headquarters in Ireland that employs hundreds, and a series of smaller local offices providing support services all over Europe. Dublin was selected as the best location to hire staff with the right skills to run a multilingual hi-tech operation serving the whole of Europe”.

Controversy overshadows user milestone

Prior to this story breaking, Facebook had been in the news for positive reasons having recently reached one billion montly users. This had given shareholders hopes of a recovery, after
continuing problems on the stock markets since they started to trade on the exchange in May this year. This will come as another blow to these stockholders, with the value of the company falling 2.90 per cent so far today.

Adrian Mursec, senior developer at theEword commented: “This is bad news for Facebook, who will have been desperate to avoid negative publicity on the back of the embarrassment over their share prices. Only time will tell how much of an impact this will have on the company as a whole, but they are sure to face scrutiny over their alleged tax evasion here.”

Written by ben_dudley_swapBen Dudley

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theEword - 22 hours ago

We are passionate about knowledge share and can’t wait to share snippets straight from Google with you on Monday http://t.co/HjF13a09zo

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theEword - 23 hours ago

We're partnering with Google for an event looking at digital trends for 2015 next week. More info here: http://t.co/etwwXV1fwq

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theEword - 2 days ago

Next week we’re co-hosting a session with #Google on digital marketing trends for 2015 and how you can grow your business online!

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theEword - 2 days ago

ICYMI: Read last week's blog on the final #LightAFire14 of the year. http://t.co/ka7Nnu4rsx

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theEword - 6 days ago

Thanks again to everyone who came to #LightAFire14 this week. Read all about the event in this blog post: http://t.co/ka7Nnu4rsx

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