Facebook Ireland pays tax of just €30m on €12.6bn

Facebook Ireland has posted soaring revenues of €12.6bn but the company paid only €30.4m in tax.

New accounts show that the 59% jump in revenues helped Facebook Ireland Ltd boost its pre-tax profits by 59% to €174.3m.

The company’s tax charge more than doubled from €14m in 2015 to €30.4m.

The tax paid represents a tiny fraction of its record revenues. However, the company said that its effective corporate tax charge last year was 17.4% — slightly higher than the headline tax rate of 12.5%.

The revenues made by the Dublin unit represent over 50% of Facebook’s global revenues of €23.3bn ($27.6bn) in 2016.

Head of Facebook Ireland, Gavin Lambe said: “As the home of our international headquarters, Ireland is an important part of Facebook’s story and our growth in 2016 demonstrated that.”

He said: “There are over 2,000 people currently working at our Dublin offices and we recently announced that hundreds more jobs will be created in 2018, making it the largest Facebook site outside California. We’re also expanding the Clonee Data Centre, further demonstrating our long-term commitment to investment in Ireland.”

The comparatively low profits are due to the firm’s huge administrative expenses paid to other Facebook entities in royalty payments and fees.

The firm’s administrative expenses for last year increased to €12.1bn largely made up of royalties payable to another Irish Facebook firm for the use of the Facebook platform; service and management fees to Facebook Inc and the costs associated with the increase in headcount.

Staff costs at Facebook Ireland increased from €77.5m to €111m.

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