Facebook set to pay more British tax after criticism

AP News
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Posted: Mar 04, 2016 6:30 AM

LONDON (AP) — 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 U.K. 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, "U.K. sales made directly by our U.K. team will be booked in the U.K., not Ireland. Facebook U.K. will then record the revenue from these sales." It said the change would "provide transparency to Facebook's operations in the U.K."

Facebook paid just 4,327 pounds ($6,116) in corporation tax in 2014 in Britain, where it recorded 105 million pounds 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.