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Tax Dodging in the UK Might Be Over for American Giants

Tax Dodging in the UK Might Be Over for American Giants

2016-03-04 14:31

Facebook sets new tax culture by starting to pay more tax in the UK.

The European countries, and maybe the UK in particular, has had it with large companies that seem to do everything they can to avoid paying tax in countries were they obviously do business. Amazon and Ebay have both found themselves in discussions with UK tax authorities when it was revealed sellers on the platforms did not pay any tax in the UK, although they had British consumers as frequent shoppers.

When EU found out that multinational companies make efficient tax deals with some European countries to avoid paying tax in others, the union announced new tax legislation was to come. The new rules will force multinational companies to show their tax arrangements to the public.

UK Deals Taxed in the UK

Now Facebook seems to be giving up the tax fight when it reveals that the social network is about to change its corporate structure so that advertisement deals made in the UK also will be taxed in the UK, TNW News reports. From April Facebook’s customers in the UK will receive invoices from Facebook UK and not Facebook Ireland, according to a document seen by the BBC.

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- What this means in practice is that UK sales made directly by our UK team will be booked in the UK, not Ireland. Facebook UK will then record the revenue from these sales. In light of changes to tax law in the UK, we felt this change would provide transparency to Facebook’s operations in the UK, read the document.

According to Facebook the "new structure is easier to understand and clearly recognises the value our UK organisation adds to our sales through our highly skilled and growing UK sales team".

Johanna Allhorn

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Journalist who has previously worked for several big media oulets making both newspapers and television broadcasts. Now contributing to the editorial content on Ecomony.

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