Re:Facebook paid £4,327 corporation tax in the UK in 2014
by radu_floricica on Monday October 12, 2015 @09:17AM
(#10374267)
That's a different case. I was simply saying _tech_ corporations often operate at a loss for a very long time. I'm reasonably sure Amazon didn't make a profit for decades, assuming it does now. This is not paperwork hand-waving, they're actually reinvesting all income, plus as much extra they can raise.
Re:Facebook paid £4,327 corporation tax in the UK in 2014
by exDM69 on Monday October 12, 2015 @10:47AM
(#10374807)
> I was simply saying _tech_ corporations often operate at a loss for a very long time.
Facebook is not operating at a loss in the UK or elsewhere. That's just their creative accounting after diverting funds offshore to tax havens in the form of royalties.
The exact same scheme is employed by the aforementioned hamburger franchises.
So is every other company operating in Europe, and they have to pay their corporate taxes. But the multinational corporations evade their corporate taxes and get an unfair competitive advantage.
A practical example: a hamburger and fries from a local franchise costs 2 eur (about 20%) more than one from McDonalds, because the latter doesn't pay their taxes to this country, using the same "license fee" trick as Facebook, channeling all of their profits through Netherlands, Luxembourg and/or Ireland.
These tricks are known with names such as "double Irish with a Dutch sandwich".