Facebook set to pay more British tax after criticism

Facebook CEO Mark Zuckerberg speaks during a visit to a Facebook Innovation Hub in Berlin, Thursday. Feb. 25, 2016.

Social media giant Facebook, which has been under fire in Britain for its tax arrangements, said Friday it will stop routing its British sales through Ireland - a practice that had kept its UK tax bill extremely low.

Facebook, Amazon and other multinationals have been criticized for using complex tax arrangements in Europe to drastically reduce their bills.

Facebook said in a statement that from April, “UK sales made directly by our UK team will be booked in the U.K., not Ireland. Facebook UK will then record the revenue from these sales.” It said the change would “provide transparency to Facebook’s operations in the UK.”

Facebook paid just $6,116 in corporation tax in 2014 in Britain, where it recorded $148 million in revenue. The U.K. is one of its biggest markets outside the United States.

The company did not say how much more tax it would pay under the new arrangements in Britain, where the corporation tax rate is 20 percent of taxable income.

Facebook’s announcement follows Britain’s introduction of a “diverted profits tax” of 25 percent to deter companies from using complex international arrangements to cut their tax bills.

Last Update: Wednesday, 20 May 2020 KSA 09:48 - GMT 06:48