In response to details of Facebook's 2012 accounts published this week, the social media firm is defending the amount of tax it paid last year and has stated that it is fully compliant with Irish tax authorities.
The Irish Examiner reports that accounts show that last year the firm paid corporation tax of €5.4m ($7.4) that included an Irish corporation tax charge of €1.95m ($2.67) as revenues soared by 70% to €1.78bn ($2.44bn). However, in spite of the surge in revenues, the firm recorded a pre-tax loss of €626,000 ($857,769).
This arose primarily from the firm paying administrative expenses to other group companies, including a royalty payment of €799m ($1095m) to parent Facebook and a separate payment of €770m ($1055m) to the Dublin-based unlimited firm, Facebook Ireland Holdings.
In 2011, Facebook Ireland’s Irish corporation tax charge was €975,000 ($1,333,982) as it recorded pre-tax losses of €18.37m ($25m) on revenues of €1bn.
A spokesman said that the company was taxed on its profit figures not its revenue figures.
“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," he said.
“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 filed by Irish-based Facebook subsidiary, Facebook Payments International Ltd, whose principal activity is the processing of payments for the Facebook group, show the firm’s revenues totalled $11.5m last year and a modest profit of $10,000. The Irish Examiner reports that accounts showed that the firm paid corporation tax of $2,000.