Facebook paid less tax despite booming UK profits

Facebook’s parent company Meta’s UK unit’s tax bill fell 19% in 2021, despite a 17.1% rise in business profit.

The company’s latest company report filed with the UK Entrepreneurship Register shows tax payable for the financial year ending December 2021 to increase from $41m (£36.7m) to $33.3m (£29.8m) Decreased. Facebook revenue increased to $2.2 billion (£1.8 billion). Profits also increased from $1.4 billion (£1.3 billion) to $257 million (£229 million).

Facebook had to pay $78.7m (£69.7m) in taxes, which it was able to offset with tax credits of $26.4m (£23.4m) from employee equity grants. The value of this tax credit against an employee’s equity his grant or restricted share unit has almost doubled to $126.5m (£112.8m) since 2020, according to the report. The final amount of the tax credit will depend on Meta’s share price. , and Britain’s new prime minister, Kwasi Kwarten, has pledged to scrap plans to raise corporate tax from 25% to 19% from next year.

Meta’s U.K. division, which sells advertising to U.K. companies and provides engineering, marketing and sales support to the entire company, surged in profits despite a 37% increase in headcount to 5,148. Realized. Facebook will open a new office in London’s King’s Cross in March 2022 with a capacity of more than 5,000 employees, with senior executives Nick Clegg and Adam Mosseri running international affairs and Instagram, respectively. , suggesting plans to move to the British capital.

Meta CEO Mark Zuckerberg said last week that the company plans to cut its workforce, Bloomberg reports. Zuckerberg had warned that a “recession” would affect digital advertising, with second-quarter results in July that fell short of analyst expectations. Meta’s share price is down 58% so far this year as it undermines its online advertising business.

“Last year we paid $8.52 billion in corporate taxes worldwide, with an average effective tax rate of about 20% over the past decade, but under current rules, the majority of that was paid in the United States,” Meta said. said. forbes“While we pay the required level of tax under international tax law, we understand that multinationals are unhappy with how they are taxed, and we have long advocated reforming the global tax system. We hope to make further progress towards implementing the OECD tax treaty, which could mean companies like Meta pay more taxes in various places. I have.”