The chair of the U.K. Parliament’s Public Accounts Committee, Margaret Hodge, had some harsh words for Facebook over its low tax bill and its method of legally avoiding taxation by channeling its revenues through Ireland, home of its European headquarters.
Guess how much Facebook paid in U.K. corporation taxes for 2013? Hint: If your guess was a positive number, you were too high.
Facebook teamed up with Boston Consulting Group to release a study in June on how its data center in Luleå, Sweden, is impacting the local economy, and the social network undertook a similar venture with RTI International to measure the economic effects of its data center in Forest City, N.C.
Facebook’s data center in Prineville, Ore., does more than simply house servers, according to an economic analysis of the facility’s impact on the region and the state commissioned by the social network and conducted by ECONorthwest.
Facebook Ireland turned a gross profit of €1.79 billion ($2.45 billion) in 2012, but it reported a pre-tax loss of €626,000 ($857,243). This may sound sketchy, but the company was fully compliant with the law. Financial Times explained how this happened.
The tax man cometh and, in the case of Facebook in the U.K., he leaveth empty-handed, as The Guardian reported that the social network paid no taxes in the U.K. in 2012, despite seeing its income there rise by 70 percent, and despite accounting for nearly one-half of the £6 billion ($9.66 billion) that eMarketer projects for 2013 digital ad spending in the U.K.
Student group Europe Versus Facebook has tangled with the social network before, in case you couldn’t tell by its name, filing numerous complaints related to Facebook’s privacy policies starting in 2011. Now, EVF is taking on Facebook again over its alleged role in the U.S. National Security Agency’s Prism initiative, and the group is also taking on Apple, Microsoft, Skype, and Yahoo.
You can’t get to 1.11 billion friends without spending a few dollars: Consumer Watchdog reported that the social network spent $2.45 million on lobbying efforts during the first quarter of 2013, up a whopping 277 percent from $650,000 in the year-earlier period.
Not too many people can handle a tax bill of more than $1 billion, but Facebook Co-Founder and CEO Mark Zuckerberg is a member of that exclusive club, and CNN Money reported that his total tab will likely end up at around $1.1 billion.