What To *Like* About Facebook's Tax Affairs?

The latest insight into the tax affairs of the world's favourite social network did not flash up on the financial newswires on which so many traders, investors and journalists rely.

Nor did it pop up on my Facebook newsfeed.

Instead, Sky News requested sight of the document from Ireland's Companies Registration Office which promptly supplied it.

Facebook has its Europe, Middle East & Africa headquarters in Dublin and the latest filings by Facebook Ireland Ltd show that almost half its global revenue is declared through Ireland's low corporate tax regime.

Based on 2013 revenues (sales) of €2.977bn (£2.34bn), Facebook Ireland Limited reported pre-tax profits of just €7.29m (£5.75m) on which it paid tax of just €2.3m (£1.8m).

Oh, and by the way Facebook paid ZERO tax in the UK that year. How do you *like* that one?

No company is without its expenses. Facebook employs 500 people in Dublin and has recently moved into some glittering new offices. But the majority of its declared expenditure was in payments to other Facebook-owned companies in Ireland and other jurisdictions.

Facebook Ireland Ltd paid €1.53bn for "licence expenses" - effectively the right to use the Facebook name - to Facebook Ireland Holdings which is a unlimited company for which no accounts need to be made publicly available.

Another €969m went to Facebook Inc. - the US mother company - for data hosting services and management fees.

€259m was paid to other Facebook companies for marketing and support services.

When it comes to taxation, this somewhat ludicrous - but perfectly legal - arrangement where one subsidiary of a company charges another for use of a brand name or other support services such as marketing is a bit like me charging my children for cooking them their dinner or the right to use my surname.

Similar arrangements are employed by other multinationals such as Starbucks in Britain which pays brand royalties to a sister company in the low-tax Netherlands, not to mention a surprisingly high price for its own coffee.

It is these kind of arrangements which the Chancellor George Osborne hopes to take a slice out of with the introduction of his so-called "Google Tax" which aims to take 25% of the profits made by multinationals in Britain before they're diverted abroad.

He's jumped the gun on the OECD - the world's economic management club - which is planning a new set of rules to combat what's known as "transfer pricing".

Ireland which has attracted multinational superstars such as Google, Apple and Microsoft to its shores with its low, 12.5% corporation tax rate has already bowed to international pressure and has announced the gradual phasing out of the so-called "Double Irish" tax loophole which allowed multinationals to transfer some of their profits to subsidiaries that were effectively "stateless" for tax purposes.

So before you re-post this article on Facebook to say how angry you are about companies like - erm – Facebook, you can perhaps take some solace that things are changing, however slowly.

The mantra we've heard from Facebook et al of late is that they follow the tax rules that governments set for them. But don't forget that whatever rules there are, they will always try to find a creative way around them.