Facebook UK Paid £35m In Staff Bonuses, But Only £4,327 In Corporation Tax (gu.com)

New submitter Phil Ronan writes: After getting away with paying £0 corporate tax in 2013, Facebook UK has announced that its corporate tax payment for 2014 (total revenue: £105 million) is going to be £4,327. This is a tiny fraction of the £35 million pounds given away by the company in staff bonuses over the same period. "The share scheme was worth an average of more than £96,000 for each member of staff. Once salaries were taken into account, a British employee of Facebook received more than £210,000 on average. ... A spokesperson for Facebook said: 'We are compliant with UK tax law, and in fact in all countries where we have operations and offices. We continue to grow our business activities in the UK.' She added that all the firm’s employees paid UK income tax on their payouts."

Comments

So the taxes were collected from salaries instead?

[willworkforbeer]

Is the British corporate rate that different from the personal rate? Did the British government not collect the taxes either way, or did I miss something?
(North American here, not an expert on British tax rates)

TLDR, were any laws broken?

[CQDX]

If not, what's the complaint? I'm sure the UK government got a nice slice of the pie in the form of income taxes on all those highly paid employees.

Re:TLDR, were any laws broken?

[amiga3D]

The problem is that all corporations are evil. They should give every cent they make to the government to be handed out according to a fair distribution system.

Re: Facebook says it was just an honest mistake

[Anonymous Coward]

Wow, the hexedecimal is strong with you.

Re:So the taxes were collected from salaries inste

[Andreas Mayer]

Then the salaries of the employees are taxed - taken from the already taxed profits the corporation made.

Um. No.

Profit is what's left when every expense has been subtracted. If you don't have anything left after paying your employees, you made no profit and don't have to pay tax for it.

Unless it's really different in the UK; which I doubt.

Transfer pricing

[Anonymous Coward]

FB employs very few people in the UK, what it does is known as transfer pricing.

It creates an asset that is held by an off shore low tax country, it then licenses that asset from the UK company to remove the tax liability in the UK.

The assets are typically synthetic, designed exactly for transfer pricing, so FB UK will be paying for the right to the trademark Facebook, and licenses for patents, and so on.

The EU and US came up with this plan back in the 90's, they were going to be the IP economies, licensing stuff and making money that way, and China would be the manufacturing.

What happened is that IP rights are trivial to transfer to an offshore holding company, and so they can skirt taxes using that. So EU and US ended up with Federal and National debts ( as no taxes are coming in), minimal jobs, and don't even hold the IP rights. Meanwhile you need to license these patents in EU and US, so the cost of manufacturing in the EU and US remains insanely high.

In China for example, the only patents that are licensed are for the end goods shipped to the US and EU, giving them a competitive advantage, courtesy of disloyal or incompetent treaty negotiators in the developed countries. /fuck tpp

Re:So the taxes were collected from salaries inste

[beelsebob]

The point is not that the tax wasn't paid on the money handed to employees, it's that it clearly wasn't paid on something else.

You don't hand out £35m in bonuses to employees if you only made £15000 profit (what you would approximately need to in order to pay ~£4000 tax). Clearly the company is doing well, and making a large profit, or the management wouldn't feel the need to give everyone bonuses, so why then is the tax bill not higher?

Who Cares?

[bobbied]

If Facebook (or any other company) paid their LEGAL tax oblation, what's the beef? If they are not cheating and breaking the rules, WHO CARES?

If a resident of the UK somehow get's the idea that Facebook *should* be paying more, then it's up to you to CHANGE THE LAW to make it fair. You guys have elections, you elect the people who write the laws, go make your case with them and insist they change the law..

I get so tired of this, "all big corporations are evil" narrative, especially for companies which are FOLLOWING THE LAW. IMHO MOST companies follow the law, both because it's good for business and because folks don't like going to jail. So can we please stop with this narrative? It's not valid.