Facebook Ireland has declared “we do not avoid tax

Its corporate tax bill was €16.53m last year, representing just a tiny percentage (0.002%) of revenues of €7.89 billion. This was still significantly larger than its 2014 tax bill of €3.4 million. Newly filed accounts showed that revenues were €3bn healthier than in 2014 – a 63% increase – while pre-tax profits sawed an eightfold increase from €12.82m in 2014 to €109.57m. The discrepancy between revenue and profits owes to massive administrative expenses Facebook Ireland pays to the social media giant’s other entities in royalties and fees.

The company’s Irish revenues accounted for 56% of its global turnover of $17.93bn in 2015.

A Facebook Ireland spokesperson noted that the tax bill “represents an effective tax rate of 12.8% in line with the statutory tax rate of 12.5%.”

They continued:

“There are strict accounting and tax rules in Ireland that all companies have to comply with. We follow these rules and pay all the taxes that we are required to under Irish law. We do not avoid tax. We comply with all tax laws in the countries in which we operate.”

Gareth Lambe, head of Facebook Ireland, said:
“We are proud that, in 2015, we have continued to grow our business and focus on our goal of connecting the world. The increase in our revenue is attributable to growth in advertising from the international business community that advertises on our platform.

“2016 has been an exciting year as we continue to invest in Ireland and concentrate on our advantages as a talent hub and centre of excellence.”

Facebook employs 1,500 people in Ireland. Staff costs were up from €62m to €77.5m last year.

It was also reported at the start of December that the company is considering opening a new office in Cork. It has been looking at moving into the new Capital development on St Patrick’s Street and Grand Parade, due for completion in early 2017.