Facebook Inc (FB) To Change Billing Structure for Big UK Clients
Facebook Inc (NASDAQ:FB) appeared to have succumbed to the pressures being exerted in the recent past following the charges of evading tax in the United Kingdom for the revenue it earned from there. As a result, the company is changing the billing structure from April for big clients like Tesco PLC or the WPP Plc, an advertising agency and the Unilever. The social media firm would be communicating its decision to its clients on Monday.
Move To Result Higher Tax
Until now, Facebook Inc (NASDAQ:FB) has been billing its advertising clients from its International headquarters at Ireland. This would be changed from April when the invoice would be issued from the United Kingdom office. As a result, it would have to pay a higher tax than $6,128 it paid in the year 2014. That invited criticism that even the average worker pays a higher tax. However, the company failed to provide as to how the move would increase the tax burden.
As far as the small businesses were concerned, it would continue to be managed by its global office in Ireland since the ads were book with the help of online only and that there was no involvement of local staff. The tax rate in Ireland was cheaper than the rest. The company’s recent move was in reaction to the mounting pressure applied on the technology firms from the America as they have been charged with avoiding paying tax in the Great Britain.
Changes In Tax Law
However, Facebook Inc (NASDAQ:FB) said that it was only responding to changes in the tax laws in the Great Britain. The company disclosed that its move would enable it to be transparent as far as its operations in the UK were concerned. The social media firm indicated that the new structure was easy to understand and recognized its UK office value.
It was not just Facebook Inc (NASDAQ:FB) that alone was forced to toe the line. In January, Alphabet Inc (NASDAQ:GOOGL) had to make 130 million pounds sterling as tax and interest for the period since 2005. Apple Inc. (NASDAQ:AAPL), as well as, Amazon.com, Inc. (NASDAQ:AMZN) were also not spared from the attack for their tax arrangements in the Great Britain.
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