Facebook, which is one of the leading social media giants around the world have seemingly gone without pay taxes for the 2012 fiscal year. Facebook UK, which officially announced that last year was at a loss for profits and went without paying any taxes to the UK government. €34.6 Million were said to have been earned in 2012, but experts believe the real size of Facebook's earned income ranks somewhere near €200 Million.
Almost every social media site relies on advertising to create most of their revenue and Facebook is no different. What they have done is place their corporate books from Facebook UK and placed them in Ireland, where the tax rate for corporations is a lot lower. HM Revenue & Customs have deemed this totally legal however, but with economies around the world recently fluctuating and the public vocal, the UK government are looking to make sure the social giants pay their fair share in the future.
Uk officials are saving face by saying Facebook is skipping out on taxes that should be paid to help eliveate the British taxpayer, with online corporations having the ability to position their business in the best tax rates in the world. While corporations having no set nation they are tied to, the high rates other countries force on their citizens can be avoided for higher profits. This looks like the UK will strongly consider putting in new regulations in the coming years to help force companies like Facebook in recording the sales from advertising in the UK.
Last year, Facebook recorded nearly $6 Billion across worldwide turnover rates and over half of that came from outside the US alone. The ironic thing about all this though is back in 2010, it was stated by the UK government that it was going to close all tax loopholes, which asks the question ‘What Happened?’. While Facebook is doing nothing illegal and is paying the required taxes the UK government is asking, it will be interesting to see how much longer this is allowed. David Cameron, the prime minister of the UK is already starting to be looked at as a failure, but then again when political figure isn't these days?