Facebook will pay more tax in the UK, instead of dodging tax by channeling sales through Ireland. The change follows after heavy criticism from British politicians on the tax structure of Facebook and other tech giants. Earlier this year, Google already promised 130 million pounds (170 million euros) to pay back taxes in the country. Facebook’s profit made on ads from major companies such as Tesco and Sainsbury’s will be taxed in the United Kingdom. Sales of small advertisers who buy space on Facebook, without wanting British staff of the social network assistance will still flow through Ireland.
According to the BBC, the new structure Facebook probably an annual tax bill of millions of pounds on. In 2014, Facebook paid 4,327 pounds (5,570 euros) in taxes to the British tax authorities. UK Prime Minister David Cameron wants to introduce a tax on profits is funneled abroad by large multinationals. Also, the new tax is expected to have a major impact on Facebook.
The UK wants to export tax profit by 25 percent, while excess profits must be paid 20 percent in the UK. In an internal message from Facebook, as reported by the BBC, the social network says that the new structure “gives transparency to the activities of Facebook in the UK”. There would be no question of a formal agreement with the British tax authorities, all go there rumors about an investigation into Facebook by the tax authorities. The social network has about 850 employees in the country.