Founder and CEO of Facebook Mark Zuckerberg at the Mobile World Congress in Barcelona | David Ramos/Getty Images
Facebook pays £4.1 million in UK taxes, but gets £11.3 million tax credit
Social media company gets a big tax break for paying out stock options to employees.
Facebook paid more than £4.1 million (€4.5 million) in taxes in the U.K. last year, but also posted significant losses as the company expanded its sales and marketing operations. That allowed the social media giant to book a tax credit of £11.3 million, according to a tax filing Saturday.
In 2014, Facebook paid the U.K. a mere £4,327 in taxes, setting off a firestorm of criticism that continued last weekend as the latest figures circulated in the media.
“In practice Facebook U.K. appears to have paid nothing in corporate tax to the U.K. public purse — less, even, than the £4,327 in 2014 that sparked public outrage,” Alex Cobham, director of research Tax Justice Network’s, said in a statement Sunday.
Last week, British Prime Minister Theresa May signaled that she was going to be “coming after” multinationals that tried to shift profits to other jurisdictions to avoid paying taxes.
In January, under the former Prime Minister David Cameron, Google reached a settlement and agreed to pay 10 years of back taxes totaling £130 million, and a higher rate in the future.
Both Facebook and Google, along with many other U.S. technology and pharmaceutical companies, have their European headquarters in Ireland, which has the lowest corporate tax rate in Europe. In August, the European Commission ruled that Apple owed Ireland some €13 billion in back taxes.
Facebook primarily has its sales support, marketing and engineering support operations in the U.K. The headcount at the end of last year was 854, according to the tax filing.
Revenues for 2015 totaled almost £211 million, roughly double than the year before, but it’s operating losses grew proportionally. Facebook’s total comprehensive loss amounted to £41 million versus £28 million in the prior year.
“We pay all the taxes that we are required to under U.K. law,” said Sally Aldous, a Facebook spokeswoman. “We are proud that in 2015 we have continued to grow our business in the U.K. and created over 360 new high skilled jobs.”
The company’s tax credit was related to deductions it can take for paying out stock options to employees.
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