FACEBOOK is under fire after allegations it paid
only £200,000 in UK corporation tax, despite earnings of up to £175m.
The social networking site is the latest business in
the scandal after Google, Amazon and Starbucks were also exposed for tax
avoidance.
Facebook achieved this by channelling a large
portion of their sales through its Irish subsidiary.
The media giants also only paid £2.9m overseas revenue
from its £800m profit in 2011.
Facebook’s
vice president and managing director in Europe, Joanna Shields, defended the
company’s actions: “The reason those
companies make those decisions is because of the investment environment and the
tax environment.”
Facebook
joins a recent group of businesses that have been uncovered for dodging UK
corporation tax.
In 2010,
eBay attempted to cut its £51m debt by paying only £1m tax on sales of £789m
after diverting money through overseas companies.
Ikea
paid only £8.1million of corporation tax from £1.2billion earnings in the year
2011.
In
November, the Public Accounts Committee saw spokesmen from Amazon, Starbucks
and Google grilled by MP’s over the alleged accusations.
Margaret
Hodge MP, Chairman of the PAC, said: “We’re not accusing you of being illegal,
we are accusing you of being immoral.”
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