Facebook to pay more U.K. taxes after criticism of hiding profits

Social media giant Facebook, which has been under fire in Britain for its tax arrangements, says it will stop routing its British sales through Ireland — a practice that had kept its U.K. tax bill at just over $8,000 for the year.

Facebook paid less UK taxes in 2014 than the average British tax filer did

Facebook paid less tax in Britain in 2014 than the average tax filer did that year. (Paul Sakuma/Associated Press)

Social media giant Facebook, which has been under fire in Britain for its tax arrangements, says it will stop routing its British sales through Ireland — a practice that had kept its U.K. tax bill extremely low.

Facebook, Amazon and other multinationals have been criticized for using complex tax arrangements to drastically reduce their bills.

Facebook said in a statement Friday that from April, "U.K. sales made directly by our U.K. team will be booked in the U.K., not Ireland. Facebook U.K. will then record the revenue from these sales."

The company said the change would "provide transparency to Facebook's operations in the U.K."

Facebook paid just £4,327 ($8,211 Canadian) in corporate tax in 2014 in Britain, one of its biggest markets outside the United States.

The average British taxpayer earns just over £26,000 a year — equivalent to about $49,000 Canadian.

Based on the current U.K. tax code, the average worker would pay just over £5,000 a year in taxes, which means the average Briton paid more tax in 2014 than Facebook did.

With files from CBC News

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