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Facebook taxes raise eyebrows

CHANGES to Facebook’s sales operation that could see it paying millions more in taxes “raises more questions than answers,” campaigners said yesterday.

The social media giant announced it would stop routing sales through Ireland from April to provide greater “transparency” and see it paying more in tax.

However there is no indication how much more tax the company will pay to HM Revenue and Customs as a result of the move.

The announcement comes amid widespread criticism of multinational companies’ use of complex tax arrangements to minimise their liabilities.

Tax Justice Network research director Alex Cobham told the Star: “The announcement today raises more questions than answers.

“Either this is completely voluntary from Facebook, and in fact unnecessary, or it should actually have been doing this for previous years too, which raises a question over what HMRC was doing then.”

He called for multinationals to be taxed on a unitary basis, saying: “Pretending that an entity like Facebook UK is operating independently from the rest of Facebook, maximising UK profit on its own, is absurd.”

A spokesman for HMRC said it “ensures that all multinationals pay the tax due under UK law and we do not settle for a penny less.”

Public accounts committee chairwoman Meg Hillier said: “We remain concerned that in the balance of power between corporations and HMRC, corporations have more weight.”

Shadow chancellor John McDonnell argued the announcement “means little or no real substantive change at this time.”

He said: “The Tories allow a situation that gives the impression that some of these companies think they need recognition for what most businesses and hard-working families are already doing.”

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