Facebook’s Irish arm says it is fully compliant with tax laws here

Facebook Ireland yesterday defended the amount of tax it paid last year stating that it is fully compliant with the Irish tax authorities.

Mark Zuckerberg: Facebook founder and CEO.

Details published this week of 2012 accounts show that the firm last year paid corporation tax of €5.4m that included an Irish corporation tax charge of €1.95m as revenues soared by 70% to €1.78bn.

In spite of the surge in revenues, the firm recorded a pre-tax loss of €626,000.

This arose chiefly from the firm paying administrative expenses to other group companies, including a royalty payment of €799m to ultimate parent Facebook and a separate payment of €770m to immediate parent, the Dublin based unlimited firm, Facebook Ireland Holdings.

Facebook Ireland’s Irish corporation tax charge in 2011 was €975,000 as it recorded pre-tax losses of €18.37m on revenues of €1bn.

A spokesman pointed out that Facebook was taxed on its profit figures, not its revenue figures. He said: “This is how corporate tax works across the board. Facebook is fully compliant with Irish tax laws and we work with all the relevant countries where we operate to ensure our tax compliance with local laws.”

The spokesman added: “We directly employ almost 500 people at our Dublin HQ. In addition to this, according to a Deloitte study published in January 2012, Facebook contributed €397.2m to the Irish economy and supported 4,500 jobs, of which 800 are as a result of small businesses using Facebook to grow.”

Separate accounts just filed another Irish-based Facebook subsidiary, Facebook Payments International Ltd, show that last the firm’s revenues totalled $11.5m and a modest profit of $10,000 arose from cost of sales totalling $10.35m and a foreign exchange loss of $1.1m.

The accounts show that the firm — whose principal activity is the processing of payments for the Facebook group — paid corporation tax of $2,000.

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