Facebook halves Irish tax bill to just €2.3m in 2013

The corporate tax bill for the Irish arm of Facebook more than halved to just €2.3m last year in spite of revenues rocketing to €3bn.

New accounts filed by Facebook Ireland Ltd show that the size of the firm’s business last year increased by 66% from €1.789bn to €2.977bn.

The revenues recorded at the Irish unit represented 47% of the social networking giant’s global revenues of $7.8bn (€6.34bn) in 2013.

The accounts for the Irish unit show that it recorded pre-tax profits of €7.29m, after recording pre-tax losses of €626,000 in 2012.

The firm’s corporate tax bill decreased from €5.2m in 2012 to €2.3m last year.

The comparatively low pre-tax profit is attributable to the firm’s administrative expenses increasing by €1.1bn to €2.9bn.

These expenses are largely made up of royalty payments and include royalties of €1.53bn to Facebook Ireland’s immediate parent, Facebook Ireland Holdings Ltd for licence expenses; €969m to Facebook Inc for data hosting services and management fees, along with an additional €259m in payments to related Facebook entities for marketing and support services.

In June of this year, Facebook Ireland moved to its new European HQ at Grand Canal Square in Dublin where it will have the capacity to increase to a 1,000 strong workforce.

The Dublin-based company bills third party customers for online advertising on the Facebook website.

Numbers employed increased by 11% going from 382 to 425. The pay bill, including salaries, share-based payment and pension payments, totalled €45.917m – or an average of €108,000 each.

The salary is inflated by the €4.95m payments to key management personnel.