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Arthur T Knackerbracket has found the following story:
Despite reporting a worldwide profit of $6.19bn (£4.97bn), accounts for the social network's British holding company show that it ended the year with a £11.3m tax credit, compared to a charge of £4,327 in the prior year.
Although Facebook UK did pay £4.17m in corporation tax for the year to December, accounts just filed at Companies House show that it ended 2015 in credit thanks to accounting rule changes.
The disclosures are likely to reignite the row over the amount of tax paid by large US multi-nationals in the UK, following recent comments on the subject by the Prime Minister.
The credit is the result of Facebook being able to offset some £15.5m of payments linked to its bonus scheme, meaning it ended the year with an £11.3m tax credit.
Although that does not mean HMRC (Her Majesty's Revenue and Customs) owes that amount to Facebook, the San-Francisco technology company will be able to use that credit to offset against tax due on future profits.
The entirely legal deferrals link to changes in HMRC's own accounting rules which Facebook adopted for the first time in the 2015 financial year.
This compared to £28.48m on sales of £104.9m in the prior year. For that year, Facebook paid £4,327 of corporation tax.
Losses after tax stood at £41.17m in 2015 from £28.5m in the prior year.
That loss came in part because Facebook paid £71m towards a share-based bonus scheme, the equivalent of £104,105 for every member of its UK workforce. The bonus payment equated to £35m in the prior year.
Last week, Theresa May used her speech at Conservative Party conference to highlight the issue.
In what was seen as a thinly veiled attack on Facebook and Apple, she said she was putting people in positions of power on notice that a "change must come."
"It doesn't matter to me who you are. If you're a tax-dodger, we're coming after you," she promised. "An economy that works for everyone is one where everyone plays by the same rules.
(Score: 3, Insightful) by Anonymous Coward on Tuesday October 11 2016, @02:33PM
First: 11.3m compared to 4.97bn is .23%. (Not 23%, 23 hundredths of one percent.) So, amount compared to worldwide profit: meaningless.
Second: If earned revenue walked out their door in the form of bonuses, then they weren't recorded profit to the company, correct?
Third: "This compared to £28.48m on sales of £104.9m in the prior year. For that year, Facebook paid £4,327 of corporation tax." 28.48m of what on sales of 104.9m?
Fourth: They paid 4.17m of taxes on 104.9m of sales. That is 3.97% of tax-to-sale revenue. Sure, that seems light compared to USian standards. So how does that stack up to what corporations in general pay, and how much do megacorps pay on average? Without that context you're just throwing around buckets of numbers hoping people will be impressed/outraged by Millions and Billions and Gazillions. Maybe the government wants to rethink its rules?
Finally: If I have this correct, Facebook actually paid taxes in a year they had a net loss? And can perfectly legally defer taxes based on rules that the government propagated in the first place? Yeah, a different kind of order of magnitude error: Tax-dodgers are people and corporations that willfully violate the law to avoid lawful tax. Taking advantage of tax loopholes? Fix your own house, Ms. May, then you won't have your problems. You may not have Facebook and Apple, either, by squeezing them such that there's no profit to be made. But them's the risks you take when you squeeze multinationals that don't have to be operating in your country.
Postlude: I thought Brits had more rigourous mathematical education than Americans.... Perhaps I was in error.