Facebook tax planning

2012 02 15 | Category: News

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As Facebook IPO is getting close, details about the company’s finances and corporate structure are being revealed.

The American company has a subsidiary in Ireland called Facebook Ireland Ltd, which employs 151 people. In 2010 the company shifted 15 per cent of its profits to the Irish subsidiary, where it triggered jurisdiction’s corporate tax rate of 12,5%. To compare, in the United States Facebook has to pay 35% of its profits. The manoeuvre allowed Facebook to pay 232 000 euros in Irish corporation tax out of 229,6 mln. euros earned in 2010.

Besides the subsidiary in Ireland, Facebook announced that it is an owner of two corporate entities in the Cayman Islands.

It is worth mentioning that Google also has an Irish subsidiary through which it shifts its profits to Bermuda. By using this tax planning technique Google managed to save about £2 billion in 2007-2009.

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