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In
future, Facebook will report its UK sales in Britain.
"In light of changes to tax law in the UK, we felt this change
would provide transparency to Facebook's operations in the UK,"
the company said in a statement.
In response to public anger over corporate tax avoidance, the
government last year introduced the "diverted profits tax",
widely known as the "Google tax", after the search giant
operated a similar structure to Facebook's.
The aim was to tax profits earned in Britain but reported in tax
havens through the use of contrived corporate structures.
Google says it complies with all tax rules. The company, now
part of holding group Alphabet, in January agreed to pay 130
million pounds ($184 million) in UK back taxes and interest and
said it would also start to report more revenue in Britain.
The BBC, which was first to report Facebook's plans, said the
change would mean the company was set to pay millions of pounds
more in tax.
However, that may depend on whether the UK tax authority, Her
Majesty's Revenue and Customs (HMRC) takes a tougher line with
Facebook.
While the new structure will see more revenue reported in
Britain, Facebook will only pay more tax if the company or HMRC
decides more profit is being earned in Britain than Facebook
previously claimed.
HMRC has previously downplayed the potential that increased
reporting of revenue in Britain would lead to higher tax bills.
However, UK lawmakers have repeatedly criticized HMRC for being
too lenient on big businesses in parliamentary investigations.
An HMRC spokesperson said it did not comment on individual
taxpayers, "but HMRC ensures that all multinationals pay the tax
due under UK law".
(Reporting by Tom Bergin and Michael Holden in London; Editing
by Elaine Hardcastle)
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