Timmy elsewhere

City AM:

Facebook overhauls its tax structure but, no, this does not mean that George Osborne’s Google Tax has worked. Facebook is starting to sell to large UK advertising accounts using UK-based and paid salespeople. This constitutes a “permanent establishment” under the usual international tax laws and the profits from this activity will be taxable in 2017, when Facebook starts doing this, would have been taxable last year if it had done it then, would have been taxable 50 years ago if the company had existed. So, no, something that would have been taxable before Osborne’s birth is not taxable due to Osborne’s new law. What is interesting is that those same normal tax rules mean that Facebook UK will now have to (yes, have to) start paying a royalty to Facebook Ireland, something it has not done up to now. The net effect of these two changes is uncertain: it’s not immediately obvious that the UK tax bill will rise very much, if at all, as a result of the disparate impacts.

2 thoughts on “Timmy elsewhere”

  1. Hmm, maybe I’m missing something (again), but I think you’re side-stepping the question here.

    Facebook will be taxed under those much older rules, but that doesn’t tell us anything about whether Osborne’s tax is driving them to make the change now, to expose themselves to those older taxes rather than the new one.

  2. I said it on another post :

    Lower tax rates in UK,
    Loads of tax losses in UK that Facebook would like to use,
    Change of structure,
    Less tax paid in Eire,
    No tax paid in UK because of losses

    Cue Murph saying that no company does things because of tax

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