[pjc50]

It's worse than that. The "HQ" is in Ireland, but pays "royalties" to an IP holding company in the Cayman Islands, which is where all the profits go, on which no tax is paid. This is the "double Irish" referred to in other comments.

Edit: note that you can just go and read the accounts for Facebook UK here: https://beta.companieshouse.gov.uk/company/06331310/filing-h...

A very important piece of information is left out of the article: what Facebook UK is paying in "license fees" to other parts of Facebook.

The accounts show £131m in "administrative expenses", of which I can account for £86m in staff costs from the same document. £35m of that is a "share based payments charge", which represents the accounting treatment of share options. Of course, the shares handed out are shares of the US parent and not the UK subsidiary.

131-86=£46m which isn't broken down further.

[protomyth]

Wasn't Monster Cable pulling some weird licensing arrangement like that? I know Toyota USA pays licensing to Toyota to avoid taxes in the US.

[WildUtah]

As for Toyota, Japan has the second highest corporate tax rate in the first world, after the USA. And until two years ago, Japan had the highest rates.

So I don't think Toyota was running the same schemes we see in tax havens.

[dragonwriter]

If (and I have no idea of this is true) Japan doesn't tax transfers from foreign subsidiaries to domestic parents, and the US allows transfers from domestic subsidiaries to foreign parents to be expensed, such an arrangement would avoid taxes entirely, making Japan's tax rates irrelevant.

[robk]

Those share based payments certainly get taxed when the employees exercise them, so the Exchequer sees a tasty tax base from that at least.

[ken47]

That may be true, but something something shareholder value trumps all.